     09-0994-cv (Lead)
     Ognibene, et al. v. Parkes, et al.



 1                             UNITED STATES COURT OF APPEALS
 2                                 FOR THE SECOND CIRCUIT

 3                                          October Term 2010

 4          (Argued: October 18, 2010                      Decided: December 21, 2011)

 5                           Docket Nos. 09-0994-cv (Lead) 09-1432-cv (Con)

 6                                 _____________________________________

 7   TOM OGNIBENE, YVETTE VELAZQUEZ BENNETT, VIVIANA VAZQUEZ-
 8    HERNANDEZ, MARTIN DILAN, MARLENE TAPPER, ROBERT PEREZ,
 9      FRAN REITER, SHEILA ANDERSEN-RICCI, MARTINA FRANCA
10      ASSOCIATES, LLC, REITER/BEGUN ASSOCIATES, LLC, DENIS
11   GITTENS, OSCAR PEREZ, KING’S COUNTY COMMITTEE OF THE NEW
12      YORK STATE CONSERVATIVE PARTY, and NEW YORK STATE
13                      CONSERVATIVE PARTY,
14                        Plaintiffs-Appellants,

15                                                  -v.-

16     JOSEPH P. PARKES, S.J., in his official capacity as Chairman of the New
17    York City Campaign Finance Board, DALE C. CHRISTIANSEN, JR., in his
18    official capacity as Member of the New York City Campaign Finance Board,
19   KATHERYN C. PATTERSON, in her official capacity as Member of the New
20        York City Campaign Finance Board, MARK S. PIAZZA, in his official
21    capacity as Member of the New York City Campaign Finance Board, MARK
22    DAVIES, in his official capacity as Executive Director of the New York City
23      Conflicts of Interests Board, MONICA BLUM, in her official capacity as
24         Member of the New York City Conflicts of Interests Board, STEVEN
25        ROSENFELD, in his official capacity as Member of the New York City
26     Conflicts of Interests Board, ANDREW IRVING, in his official capacity as
27      Member of the New York City Conflicts of Interests Board, ANGELA M.
28   FREYRE, in her official capacity as Member of the New York City Conflicts of
29       Interests Board, and MICHAEL McSWEENY, in his official capacity as
30                         Acting City Clerk of New York City,
31                                Defendants-Appellees.
32                       _____________________________________

                                                     1
 1   Before:         CALABRESI, LIVINGSTON, Circuit Judges, and Crotty, District
 2                   Judge.*


 3           Plaintiffs-Appellants1 brought this action in February 2008 against the

 4   Defendants-Appellees,2 challenging the constitutionality of certain provisions of

 5   New York City’s political campaign finance and lobby laws that (1) limit

 6   campaign contributions by individuals and entities that have business dealings

 7   with the City; (2) exclude such contributions from matching with public funds

 8   under the public financing scheme; and (3) expand the prohibition on corporate

 9   contributions to include partnerships, LLCs, and LLPs. Plaintiffs appeal from

10   a February 6, 2009 decision of the United States District Court for the Southern

11   District of New York (Swain, J.) granting the Defendants’ motion for summary

12   judgment. We affirm the district court’s dismissal of Plaintiffs’ challenges as to

13   all three provisions.

14           Affirmed.

15           Judge Calabresi and Judge Livingston concur in separate opinions.

16


             *
             The Honorable Paul A. Crotty, District Judge of the United States District Court for the
     Southern District of New York, sitting by designation.
             1
                Plaintiffs include New York City voters, aspiring candidates for local office, a business
     owner, lobbyists and individuals associated with lobbyists, limited liability companies, and political
     parties.
              2
                Defendants are members of New York City’s Campaign Finance Board and other City
     representatives.

                                                        2
 1                                         JAMES BOPP, JR., Bopp, Coleson & Bostrom,
 2                                         Terre Haute, IN, for Plaintiffs-Appellants.
 3
 4                                         JANE L. GORDON, Senior Counsel (Edward
 5                                         F.X. Hart, Jonathan Pines, Lisa F. Grumet,
 6                                         Andrew J. Rauchberg, on the brief), Corporation
 7                                         Counsel of the City of New York, New York,
 8                                         NY, for Defendants-Appellees.

 9   PAUL A. CROTTY, District Judge:
10
11           Appellants seek declaratory and injunctive relief, alleging that recently-

12   enacted amendments to the New York City Administrative Code, commonly

13   known as the “pay-to-play” rules, violate the First Amendment to the U.S.

14   Constitution by unduly burdening protected political speech and association, the

15   Fourteenth Amendment by denying equal protection of the laws, and the Voting

16   Rights Act, 42 U.S.C. § 1973.3 The challenged provisions (1) reduce below the

17   generally-applicable campaign contribution limits the amounts that people who

18   have business dealings with the City, including lobbyists, can contribute to

19   political campaigns, N.Y.C. Admin. Code § 3-703(1-a) (for candidates who

20   participate in the City’s optional public financing program, set forth in N.Y.C.

21   Admin. Code § 3-703 (“participating candidates”)), 3-719(2)(b) (for candidates

22   who do not participate in this program (“non-participating candidates”)); (2) deny



            3
              The complaint alleges that these provisions are unconstitutional, both facially and as
     applied. The opinion below considered only the facial challenges. See Ognibene v. Parkes, 599 F.
     Supp. 2d 434, 438, 461 (S.D.N.Y. 2009).

                                                      3
 1   matching funds for contributions by people who have business dealings with the

 2   City and certain people associated with lobbyists, N.Y.C. Admin. Code §§ 3-

 3   702(3), 3-703(1-a); and (3) extend the existing prohibition on corporate

 4   contributions to partnerships, LLCs, and LLPs, N.Y.C. Admin. Code §§ 3-

 5   703(1)(l) (for participating candidates), 3-719(2)(b) (for non-participating

 6   candidates). Appellants argue, inter alia, that the lack of evidence of actual pay-

 7   to-play corruption in City politics means that there is no legitimate interest to

 8   be protected; that the regular contribution limits already in place sufficiently

 9   address any possible interest in reducing actual or perceived corruption; and

10   that Citizens United v. Federal Election Commission, 130 S. Ct. 876 (2010)

11   prohibits all contribution limits based on the source’s identity. The district court

12   rejected appellants’ arguments and dismissed the claims on summary judgment.4

13   We affirm as to all three provisions, finding that the laws are closely drawn to

14   address the significant governmental interest in reducing corruption or the

15   appearance thereof.

16                                                I. Facts

17          In 1988, after a recent wave of local scandals, the New York City Council

18   passed the Campaign Finance Act (“CFA”), establishing the Campaign Finance



            4
            The district court decision predates Citizens United, so it did not consider this third
     argument.

                                                       4
 1   Program (“Program”). (A-819.)                The Campaign Finance Board (“Board”)

 2   administers the Program and provides public matching funds to candidates

 3   running for the three citywide offices of Mayor, Comptroller, Public Advocate;

 4   the five offices of Borough President; and the fifty-two offices of the City Council.

 5   The CFA imposes certain obligations on all candidates, including the filing of

 6   financial disclosure statements reporting contributions and expenditures,

 7   limitations on the amount of contributions from any single donor, and the

 8   obligation to respond to the Board’s requests to verify compliance with the

 9   Program. N.Y.C. Admin. Code § 3-701, et seq. The CFA also limits per-person

10   contributions for all covered elections in a single calendar year to $4,950 for

11   Mayor, Comptroller, or Public Advocate; $3,850 for Borough President; and

12   $2,750 for City Council.5 Id. § 3-703(1)(f).

13          Additionally, candidates who seek to participate in the public financing

14   system must agree to limitations on the total amount of money the campaign

15   spends promoting the candidate’s nomination or election.                         A participating

16   candidate’s campaign receives public matching funds for all eligible individual

17   private contributions from New York City residents of up to $175 at a rate of six

18   dollars in public funds for every one dollar in private contributions. Id. §§ 3-703,


            5
              Pursuant to Administrative Code § 3-703(7), these figures were increased in 2002 to reflect
     changes in the Consumer Price Index.



                                                       5
 1   3-705(1), (2). Contributions from organizations, however, including unions and

 2   Political Action Committees (“PACs”), are not eligible for matching. Id. § 3-

 3   702(3)

 4         In 1998, the New York City Charter Revisions Commission (“Commission”)

 5   sought to resolve problems that the existing law did not address. (A-314-A-316.)

 6   It proposed, and the City’s voters passed by referendum, a Charter amendment

 7   that directed the Board to prohibit corporate contributions for all participating

 8   candidates; required these candidates to disclose contributions from individuals

 9   and organizations doing business with the City; and directed the Board to

10   promulgate rules fleshing out these “doing business” limitations. N.Y.C. Charter

11   § 1052(11)(a), (12)(a).   In its recommendation, the Commission identified

12   concerns about contractor and lobbyist contributions, but noted the lack of

13   evidence that such contributions had actually influenced the award of a

14   particular contract or passage of a bill. Report of the New York City Charter

15   Revision Commission 12-13 (Aug. 20, 1998) (“1998 Commission Report”).

16   Nevertheless, the Commission concluded that there was “no doubt that these

17   contributions have a negative impact on the public because they promote the

18   perception that one must ‘pay-to-play.’” Id. at 19. The City Council later

19   enacted a separate ban on corporate contributions to all candidates, including

20   non-participating candidates.

                                            6
 1         In 2006, after several public hearings and studies, the Board reported that

 2   over twenty percent of the contributions in the 2001 and 2005 election cycles

 3   were from individuals and entities doing business with the City, who comprised

 4   only five percent of contributors, and that large contributions were more likely

 5   than small contributions to come from such donors. N.Y.C. Campaign Fin. Bd.,

 6   Interim Report on “Doing Business” Contributions 12, 13 (June 19, 2006)

 7   (“Interim Report”).     In addition, incumbents–considered to have greater

 8   influence on city decisions–were more likely to receive these large donations

 9   than challengers. N.Y.C. Campaign Fin. Bd., Public Dollars for the Public Good:

10   A Report on the 2005 Elections 122 (2006) (“2005 Election Report”). In order to

11   improve the CFA, the Board recommended banning all organizational

12   contributions (including partnerships, LLCs, PACs, and unions) and regulating

13   contributions by individuals and entities doing business with the City. 2005

14   Election Report, 120, 122.

15         That year, the City passed Local Laws 15 and 17, which created a

16   mandatory electronic filing system for lobbyists; required full lobbyist disclosure

17   of all fundraising and consulting activities; banned all gifts from lobbyists to City

18   Officials; and excluded contributions from lobbyists and the individuals

19   identified on their statements of registration from the definition of “matchable

20   contribution.” N.Y.C. Admin. Code §§ 3-213, 3-216.1, 3-225, 3-702(3)(g). This

                                              7
 1   latter category of exclusions includes the lobbyist’s spouse or domestic partner

 2   and, if the lobbyist is an organization, any officer or employee who engages in

 3   lobbying activity, as well as his or her spouse or domestic partner.

 4         In 2007, the City Council voted 44-4 to pass Local Law 34, requiring

 5   disclosure of, and restricting contributions from, individuals and entities who

 6   have business dealings with the City, as defined in the CFA. The law lowers

 7   these donors’ contribution limits approximately twelve-fold, to $400 (from the

 8   generally-applicable level of $4,950) for the three City-wide offices; to $320 (from

 9   $3,850) for Borough offices; and to $250 (from $2,750) for City Council.6 The law

10   also makes these contributions ineligible for public matching, and extends the

11   ban on corporate contributions to LLCs, LLPs, and partnerships. Id. §§ 3-

12   703(1)(l), 3-703(1-a), 3-719(2)(b). The corresponding City Council Committee

13   Report referred to the Board’s 2005 Election Report and stated that,


14         [w]hile there is nothing intrinsically wrong with contributions from those
15         doing business with the City, the ability of such individuals to contribute
16         could create a perception, regardless of whether such perception is
17         accurate, that such individuals have a higher level of access to the City’s
18         elected officials. It is important to eradicate this perception and reduce
19         the appearance of undue influence associated with contributions from
20         individuals doing business with the City.




           6
               These lower limits are not indexed for inflation. See N.Y.C. Admin. Code § 3-703(7).

                                                       8
 1   (N.Y.C. Council, Comm. on Gov’tal Affairs, Report of the Governmental Affairs

 2   Division, for Int. No. 586-2007 24-25 (June 12, 2007) (“Committee Report”).) The

 3   Committee Report explained that the expansion of the corporate contribution

 4   ban addressed a “loophole” that allowed similarly structured business entities

 5   to circumvent the contribution limits.

 6          The “doing business” limits apply to contributions from any natural person

 7   who is a chief executive officer, chief financial officer, and/or chief operating

 8   officer; serves in a senior managerial or equivalent capacity; or has an interest

 9   exceeding ten percent in an entity that has “business dealings” with the City or

10   affiliate agency, unless that person is the candidate or a relative. N.Y.C. Admin.

11   Code § 3-703(1-a). “Business dealings” include: (1) contracts greater than or

12   equal to $100,000 for the procurement of goods, services, or construction; (2) real

13   property acquisitions or dispositions; (3) applications for approval of transactions

14   involving office space, land use, or zoning changes; (4) certain concessions and

15   franchises greater than or equal to $100,000; (5) grants greater than or equal to

16   $100,000; (6) economic development agreements; (7) contracts for investment of

17   pension funds; and (8) transactions with lobbyists.7 Id. § 3-702(18).




            7
               Contracts and concessions awarded through publicly-advertised competitive sealed bidding,
     as well as emergency contracts, are excluded from the calculation. N.Y.C. Admin. Code § 3-
     702(18)(a)(i). Separate rules govern transactions providing affordable housing. Id. § 3-702(18)(a).

                                                      9
 1          Section 3-702 of the Administrative Code contains two definitions of

 2   “lobbyist”: The first is narrow, referencing § 3-211's definition of “every person

 3   or organization retained, employed or designated by any client to engage in

 4   lobbying.” The second is broader, encompassing anyone included in § 3-211, as

 5   well as the lobbyist’s spouse or domestic partner; unemancipated children; and,

 6   for entities, the organization’s officers and employees who engage in lobbying or

 7   work for a division of the organization that engages in lobbying activities and

 8   their family members.8 Id. § 3-702(16). Appellees concede that the narrower

 9   definition applies to the doing business limitations, even though the broader

10   definition has been used in the past.9 (Appellee’s Br. 11 n.5). Contributions from

11   individuals who are affiliated with lobbyists (i.e., included in the broader

12   definition) are ineligible for matching even if they are not, under the narrower

13   lobbyist definition, subject to the lower “doing business” limits.

14          As of June 30, 2008, New York City agencies (excluding affiliated entities)

15   held 19,578 open contracts worth approximately $55.4 billion. (Simpson Decl.

16   ¶ 5). A wide range of for-profit and non-profit entities qualify as having business

17   dealings with the City, including Con Edison, Waste Management of New York



            8
                All of these individuals must be included in the lobbyist’s statement of registration. Id. § 3-
     213(c)(1).
             9
               This interpretation is supported by the language of § 3-702(18), which, in defining “business
     dealings,” provides that a lobbyist as defined by § 3-211 engages in business dealings.

                                                         10
 1   LLC, the New York City Ballet, the Legal Aid Society, the Brooklyn Botanic

 2   Garden Corporation, various health and social services providers, day care

 3   centers, religious organizations, and labor organizations. See generally Doing

 4   Business Portal, http://www.nyc.gov/html/doingbiz/home.html (last visited Aug,

 5   10, 2011). Although several labor organizations and union-affiliated entities

 6   have business dealings on account of procurement contracts with the City,

 7   “collective bargaining with City employee unions is a distinct process that is

 8   governed by State law.” (Simpson Decl. ¶ 8). As a result, the procurement rules

 9   (and, consequently, the “doing business” limits) do not apply to collective

10   bargaining with City unions or to employer-employee relationship for non-

11   unionized employees. (Id.)

12         Appellants filed an original and amended complaint in February 2008 and,

13   in April 2008, moved for a preliminary injunction on some of the claims asserted,

14   raising facial challenges to these three provisions. After the district court

15   postponed the hearing on injunctive relief until the trial on the merits, the

16   Appellees moved for summary judgment. The parties then stipulated that there

17   was no need for an evidentiary proceeding in connection with the motions.

18   Several amicus curiae briefs were filed in support of Appellees, both by public

19   interest organizations and by City Council candidates.




                                            11
 1     II. The District Court Decision on Motion for Summary Judgment

 2         By Order dated February 6, 2009, the district court denied Appellants’

 3   motion for injunctive relief and granted Appellee’s motion for summary

 4   judgment on the same grounds: that the challenged limits served a sufficiently

 5   important governmental interest–addressing the reasonable concern about

 6   actual and apparent corruption by those doing business with the City. While

 7   there was no recent evidence of actual corruption with respect to campaign

 8   contributions, the district court reasoned, given the public’s perception of

 9   continuing corruption, fueled by actual pay-to-play scandals in the 1980s, the

10   City properly imposed the challenged limits to combat corruption, correct

11   misperceptions, and instill public confidence in the City’s political and

12   governmental processes. 599 F. Supp. 2d at 445-46. The court also found that

13   the contribution limits were closely drawn to respond to this interest in

14   eliminating actual and apparent corruption, rejecting Appellants’ arguments

15   concerning the failure to index for inflation and viewpoint discrimination. Id. at

16   454-55.

17         The district court subjected the non-matching provisions to the same

18   analysis and concluded that they were permissible. Id. at 456. It reasoned that

19   the legislature should not be required to use taxpayer dollars to match

20   contributions it has determined present a risk of corruption. (Id.) The court also

21   held that using the broader definition of lobbyist does not render these

22   provisions overbroad because this expanded reach is necessary to prevent

23   circumvention of the contribution limits. (Id. at 457.)


                                            12
 1           Finally, the district court upheld the ban on contributions from

 2   partnerships, LLCs, and LLPs for the same reasons that justify prohibiting

 3   corporate contributions, specifically, to prevent circumvention of the valid

 4   contribution limits and the use of business forms to deploy for political ends

 5   business assets amassed for business reasons. (Id. at 459-60.) The court also

 6   rejected the argument that this prohibition is overbroad, underinclusive, or

 7   overinclusive.

 8                                    III. Analysis

 9                               A. Standard of Review

10           A circuit court reviews a district court’s grant of summary judgment de

11   novo. Weinstock v. Columbia Univ., 224 F.3d 33, 40 (2d Cir. 2000). The

12   Court should affirm an order granting summary judgment “only when no

13   genuine issue of material fact exists and the movant is entitled to judgment

14   as a matter of law.” Riegel v. Medtronic, Inc., 451 F.3d 104, 108 (2d Cir.

15   2006). The parties here agree that these motions present no issue of material

16   fact.

17           The party requesting permanent injunctive relief must demonstrate (1)

18   irreparable harm (here, a constitutional violation) and (2) likelihood of actual

19   success on the merits. Cartier v. Symbolix, Inc., 454 F. Supp. 2d 175, 186

20   (S.D.N.Y. 2006); see also New York ex rel. Spitzer v. Operation Rescue Nat’l,

21   273 F.3d 184, 193 (2d Cir. 2001) (applying this standard to its review of a

                                             13
 1   decision on a preliminary injunction). Denials of injunctive relief, like grants

 2   of summary judgment, are reviewed de novo when they concern rights under

 3   the First and Fourteenth Amendments. See Ferris v. Cuevas, 118 F.3d 122,

 4   125 & n.3 (2d Cir. 1997); Nat’l Awareness Found. v. Abrams, 50 F.3d 1159,

 5   1164 (2d Cir. 1995). In such cases, “an appellate court has an obligation to

 6   ‘make an independent examination of the whole record’ in order to make sure

 7   that ‘the judgment does not constitute a forbidden intrusion on the field of

 8   free expression.’” Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485,

 9   499 (1984) (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 284-86

10   (1964)).

11                           B. Applicable Legal Standards

12         The Government bears the burden of justifying its contribution limits in

13   light of a facial challenge. Nixon v. Shrink Missouri Gov’t PAC, 528 U.S. 382,

14   387-88 (2000).

15         The judiciary owes special deference to legislative determinations

16   regarding campaign contribution restrictions. See, e.g., Fed. Election

17   Comm’n v. Beaumont, 539 U.S. 146, 155 (2003); McConnell v. Fed. Election

18   Comm’n, 540 U.S. 93, 137 (2003). While paying deference, the judiciary must

19   also protect the fundamental First Amendment interest in political speech.

20   In evaluating constraints on such speech and related activity, Buckley v.

                                            14
 1   Valeo distinguished between campaign expenditures and campaign

 2   contributions. 424 U.S. 1 (1976). Strict scrutiny applies to restraints on the

 3   former, while limits on the latter are more leniently reviewed because they

 4   pose only indirect constraints on speech and associational rights. See

 5   Beaumont, 539 U.S. at 161-62 (holding that restrictions on the activity of

 6   contributing to a candidate’s campaign are “merely ‘marginal’ speech

 7   restrictions subject to relatively complaisant review”); Fed. Election Comm’n

 8   v. Colo. Republicans, 533 U.S. 431, 440 (2001); Buckley, 424 U.S. at 20-21.

 9   For this reason, contribution limits and bans are permissible as long as they

10   are closely drawn to address a sufficiently important state interest. See, e.g.,

11   Davis v. Fed. Election Comm’n, 554 U.S. 724, 737 (2008); Beaumont, 539 U.S.

12   at 161; Buckley, 424 U.S. at 25; Green Party of Conn. v. Garfield, 616 F.3d

13   189 (2d Cir. 2010).

14         In certain cases, however, contribution restrictions may severely impact

15   political dialogue, for example by preventing “candidates and political

16   committees from amassing the resources necessary for effective advocacy.”

17   Buckley, 424 U.S. at 21. This question focuses on differences in kind, rather

18   than of degree. Id. at 30. A showing of special justification is required for

19   such restrictions to be closely drawn. See Randall v. Sorrell, 548 U.S. 230,

20   261 (2006).

                                            15
 1         The Supreme Court has consistently held that the prevention of actual

 2   and perceived corruption qualifies as a sufficiently important state interest.

 3   See, e.g., McConnell, 540 U.S. at 143; Shrink Missouri, 528 U.S. at 390;

 4   Buckley, 424 U.S. at 30; see also Davis, 554 U.S. at 740-41 (noting that the

 5   use of personal campaign funds, as opposed to contributions, actually reduces

 6   the threat of corruption). It is not necessary to produce evidence of actual

 7   corruption to demonstrate the sufficiently important interest in preventing

 8   the appearance of corruption. See McConnell, 540 U.S. at 150. On the other

 9   hand, “mere conjecture” is insufficient. See Shrink Missouri, 528 U.S. at 392.

10   That is, the threat of corruption cannot be “illusory.” Buckley, 424 U.S. at 27.

11   “The quantum of empirical evidence needed to satisfy heightened judicial

12   scrutiny . . . will vary up or down with the novelty and plausibility of the

13   justification raised.” Id.

14         This Court must consider three important decisions that have issued

15   subsequent to the district court’s opinion: Citizens United v. Federal Election

16   Commission, 130 S. Ct. 876 (2010); Arizona Free Enterprise Club’s Freedom

17   Club PAC v. Bennett, 131 S. Ct. 2806 (2011); Green Party of Connecticut v.

18   Garfield, 616 F.3d 189 (2d Cir. 2010).

19         In Citizens United, the Supreme Court held that the government

20   cannot prohibit independent expenditures in support of a political candidate

                                              16
 1   based on the source’s corporate identity. 130 S. Ct. 876. Contrary to

 2   Appellants’ exhortations, however, Citizens United applies only to

 3   independent corporate expenditures. It reaffirms existing precedent on the

 4   propriety of contribution limits. It therefore has no impact on the issues

 5   before us in this case:

 6
 7         [U]nlike limits on independent expenditures, [contribution limits] have
 8         been an accepted means to prevent quid pro quo corruption. Citizens
 9         United has not made direct contributions to candidates, and it has not
10         suggested that the Court should reconsider whether contribution limits
11         should be subject to rigorous First Amendment scrutiny.

12   Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876 (2010) (citations

13   omitted). Citizens United confirmed the continued validity of contribution

14   limits, noting that they most effectively address the legitimate governmental

15   interest, identified by Buckley, in preventing actual or perceived corruption.

16   Id. at 909-10 (quoting the standard of Fed. Election Comm’n v. Nat’l Right to

17   Work Comm., 459 U.S. 197 (1982)); see also In re Cao, Nos. 10-30080 & 10-

18   30146, 2010 U.S. App. LEXIS 19056, *9 (5th Cir. 2010) (holding that Citizens

19   United applies to independent campaign expenditures and has no relevance

20   to contribution limits). Indeed, the Court reiterated that the wealth amassed

21   by corporations and business interests is more effectively used to obligate

22   legislators when spent on contributions, rather than independent


                                            17
 1   expenditures, over which the candidate has less control. See Citizens United,

 2   130 S. Ct. at 908-09.

 3           Since the Supreme Court preserved the distinction between

 4   expenditures and contributions, there is no basis for Appellants’ attempt to

 5   broaden Citizens United. Appellants’ selective and misleading quotes

 6   carefully skip over the Court’s clear distinction between limits on

 7   expenditures and limits on contributions.10 (See, e.g., Reply Br. 3). The

 8   Supreme Court has repeatedly stated that the Circuit Courts are to apply the

 9   law as it exists, unless it is expressly overruled. See Agostini v. Felton, 521

10   U.S. 203, 237 (1997) (“If a precedent of this Court has direct application in a

11   case, yet appears to rest on reasons rejected in some other line of decisions,

12   the Court of Appeals should follow the case which directly controls, leaving to

13   this Court the prerogative of overruling its own decisions.” (quoting Rodriguez

14   de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477, 484 (1989)). Citizens




             10
                Appellants argue that the anti-influence theory is not sufficient to justify contribution
     limits, quoting from Citizens United: “Reliance on a generic favoritism or influence theory is at odds
     with standard First Amendment analysis because it is unbounded and susceptible to no limiting
     principle.” 130 S. Ct. at 910 (internal quotations omitted). But the Court made clear that it was
     dealing with independent corporate expenditures, not with limits or even bans on campaign
     contributions (or the source of contributions). Appellants twist Buckley so that it is only applicable to
     quid pro quo corruption. But quid pro quo is already covered by bribery laws. Instead, Buckley
     expressly approves restrictions on campaign contributions to facilitate the prevention of all actual
     and apparent corruption.

                                                        18
 1   United left Buckley intact, and it is not for this Court to stretch Citizens

 2   United.

 3         After handing down Citizens United, the Supreme Court invalidated an

 4   Arizona public financing scheme under which public matching funds were

 5   triggered by a privately financed candidate's level of expenditures. Bennett,

 6   131 S. Ct. 2806. Arizona gives publicly financed candidates an initial

 7   allotment of public funds to begin their campaigns. Under the challenged

 8   law, if a privately financed, opposing candidate's expenditures (combined with

 9   independent expenditures in support of the privately financed candidate and

10   opposed to the publicly financed candidate) exceeded the amount of this

11   initial outlay, the publicly financed candidate received a proportionate

12   amount of additional matching funds, up to twice the initial amount. Id. at

13   2814-15.

14         The Supreme Court determined that the provision posed a “markedly

15   more significant burden” than the Millionaire's Amendment struck down in

16   Davis v. Federal Election Commission, 128 S. Ct. 2759, particularly because it

17   effectively punished the nonparticipating candidate for spending his own

18   money on his own campaign. Bennett, 131 S. Ct. at 2819. The Court

19   repeated its holding that there is no compelling state interest in leveling the

20   playing field, id. at 2825; and concluded that Arizona's proffered interest in

                                            19
 1   preventing corruption and its appearance did not justify the burden posed on

 2   a candidate's expenditures of his own funds. Id. at 2826.11

 3           Bennett binds us, but for reasons we explain later, it does not control

 4   the outcome in this case. Bennet reaffirmed several key holdings: (1) that the

 5   lower closely drawn standard applies to contribution limits, 131 S. Ct. at

 6   2817; (2) that preventing corruption and its appearance is a compelling state

 7   interest, id. at 2825; and (3) that public financing is still a valid means of

 8   funding political candidacy. Id. at 2828.

 9           In addition, this Court recently struck down the State of Connecticut’s

10   ban on lobbyist contributions. Green Party, 616 F.3d 189. The Court found

11   that there was “insufficient evidence to infer that all contributions made by

12   state lobbyists give rise to an appearance of corruption.” Id. at 206 (emphasis

13   in original). It reasoned that an outright ban was not closely drawn because a

14   limit would have effectively addressed the appearance of corruption created



             11
                We flatly reject Appellants’ argument, submitted in its June 28, 2011 letter, that “Justice
     Kagan, writing in dissent in [Bennett], opines that contribution limits are ineffective at preventing
     corruption.” This is a misciting of Justice Kagan’s opinion. She does not draw the conclusion that
     contribution limits are per se ineffective. Rather, she poses a hypothetical in which two States are
     “plagued by a corrupt political system” in which “candidates for public office accept large campaign
     contributions in exchange for the promise that, after assuming office, they will rank the donors'
     interests ahead of all others.” Bennett, 131 S. Ct. at 2829 (Kagan, J., dissenting). In such dire
     circumstances, contribution limits alone may be insufficient and easily circumvented through
     bundling, requiring further regulation. The Court notes that, under Green Party, such a history of
     actual corruption would merit an outright ban on troublesome contributions. This does not mean
     that contribution limits are always ineffective; they may adequately address less drastic
     circumstances. For this reason, the relevant analysis requires that the remedy be closely drawn.

                                                       20
 1   by lobbyist contributions. Id. at 207 & n.15 (noting that because

 2   Connecticut's recent corruption scandals “in no way implicated lobbyists,” “a

 3   limit on lobbyist contributions would adequately address the state’s interest

 4   in combating corruption and the appearance of corruption on the part of

 5   lobbyists” (emphasis in original)). Implicit in the Court’s reasoning is the

 6   determination that a recent history of corruption is not required for limits to

 7   pass constitutional review.

 8         Green Party sustained a ban on contributions from state contractors

 9   because they had been implicated in a series of recent scandals. Id. at 204-05.

10   While a limit may address the actual and perceived corruption, it does not

11   entirely eliminate it because some exchange of money is still allowed. When

12   the appearance of corruption is particularly strong due to recent scandals,

13   therefore, a ban may be appropriate.

14         Appellants urge us to expand Citizens United, Bennett, and Green

15   Party to invalidate the three provisions they challenge. We conclude,

16   however, that their arguments do not comport with the express language and

17   reasoning of these opinions.

18                       C. “Doing Business” Contribution Limit

19         The doing business limitations have three characteristics that place

20   them outside the scope of Citizens United and Green Party: First, they deal

                                            21
 1   with contributions (as opposed to expenditures). Second, they are limits (as

 2   opposed to outright bans). Third, they address the appearance of corruption

 3   (as opposed to the appearance of influence). The doing business limitations

 4   are only indirect constraints on protected speech and associational rights;

 5   they are not subject to strict scrutiny but rather to the more lenient, closely

 6   drawn standard of review. In addition, the heightened evidentiary

 7   requirement urged by Appellants does not apply.12

 8           Citizens United confirms, yet again, that eliminating corruption or the

 9   appearance thereof is a sufficiently important governmental interest to justify

10   the use of closely drawn restrictions on campaign contributions. This interest



             12
                 The doing business limits differ from the generally applicable limits in degree, not in kind.
     Appellants argue that the limits hinder candidates’ ability to amass contributions from business
     interests, but that is the purpose of the law. Appellants make no argument that these provisions
     pose unusual constraints on candidates’ fundraising or contributor’s associational rights. Whether
     the contribution limits hinder the ability to amass contributions from business interests is not the
     relevant test. Rather, the test is whether candidates have access to sufficient funds to run campaigns
     where they can effectively engage with the electorate. The data indicate that the challenged
     provisions actually have such a positive effect on fundraising ability. See CFB Analysis: Fundraising
     Shows New Focus on Small Contributions During 2008 1, 2 (2008), available at
     http://www.nyccfb.info/press/news/press_releases/2008-07-24.pdf (finding that “candidates for City
     office in the 2009 elections are raising funds at an unprecedented rate” and that “small contributors
     are starting to play a greater role in City campaigns”). Appellants also fail in their attempt to fit this
     case into Davis v. Federal Election Commission, which rejected different expenditure limits for
     different candidates, not donation limits for different contributors. Davis, 554 U.S. at 737-38. Even
     if this particular doing business limit may be called novel, as Appellants argue, the justification for
     it–to reduce the appearance of corruption–is not. Restrictions on contractor contributions are not
     uncommon and the notion that money and governmental favors are connected is far from
     implausible. See, e.g., N.Y. Elec. L. 14-114(9) (limiting contributions to candidates for and members
     of the New York City Board of Estimate by persons with a matter pending before the Board six
     months before and twelve months after) (repealed by 1997 Sess. L. News of N.Y. Ch. 128 (A. 7887)
     upon abolition of the Board of Estimate); Green Party, 616 F.3d 189; Blount v. S.E.C., 61 F.3d 938
     (D.C. Cir. 1995); Fed. Election Comm’n v. Weinstein, 462 F. Supp. 243 (S.D.N.Y. 1978). Under
     Shrink Missouri, therefore, the quantum of empirical evidence needed is not particularly high.

                                                        22
 1   exists even where there is no actual corruption, because the perception of

 2   corruption, or of opportunities for corruption, threatens the public’s faith in

 3   democracy. See Fed. Election Comm. v. Colo. Republicans, 533 U.S. 431, 440-

 4   41 (2001); Buckley, 424 U.S. at 24. In fact, as noted in Green Party, while a

 5   limit may be sufficient to address actual corruption, the appearance and

 6   public perception of corruption may be so grave as to merit a ban.

 7           Although Citizens United stated that mere influence or access to

 8   elected officials is insufficient to justify a ban on independent corporate

 9   expenditures, improper or undue influence presumably still qualifies as a

10   form of corruption.13 See Bennett, 131 S. Ct. at 2827 (discussing the “'interest

11   in alleviating the corrupting influence of large contributions'” served by

12   contribution limits (emphasis added) (quoting Buckley, 424 U.S. at 55)); Colo.

13   Republicans, 533 U.S. at 440-41 (“[L]imits on contributions are more clearly

14   justified by a link to political corruption than limits on other kinds of

15   unlimited political spending are (corruption being understood not only as quid

16   pro quo agreements, but also as undue influence on an officeholder's



             13
                 In any event, the Supreme Court’s reservation about preventing mere influence as a
     justification is limited to independent expenditures. Citizens United, 130 S. Ct. at 910. The Court
     asserted that the appearance of influence in that context will not cause the electorate to lose faith
     because, by definition, independent expenditures are intended to appeal directly to these voters,
     reinforcing the paramountcy of their (as opposed to the source of funds’) influence in the process. Id.
     Whatever may be said about this explanation, it clearly does not apply to contribution limits, which
     directly benefit the candidate and only indirectly persuade the voters.

                                                       23
 1   judgment, and the appearance of such influence).” (citations omitted)

 2   (emphasis added)); Republican Nat’l Comm. v. Fed. Election Comm’n, 698 F.

 3   Supp. 2d 150, 158-60 (D.D.C. 2010). Improper or undue influences includes

 4   both traditional quid pro quo and more discreet exchanges of money for

 5   favorable outcomes.14

 6           While independent corporate campaign expenditures may influence a

 7   candidate, or facilitate access that non-speakers may not enjoy, Citizens

 8   United emphasized the right to speech and its independence from the

 9   candidate. Direct giving to the candidate, or the candidate’s campaign

10   committee, stands on a different footing. Since neither candidate nor

11   contributor is likely to announce a quid pro quo, the appearance of corruption

12   has always been an accepted justification for a campaign contribution

13   limitations. See McCormick v. United States, 500 U.S. 257, 272-73 (1991)

14   (holding that an elected official’s receipt of a campaign contribution amounts

15   to extortion only when an official asserts that his official conduct will be

16   controlled by the terms of the promise or undertaking, but noting that the

17   implicit exchange of benefit for money “in a very real sense is unavoidable so

             14
                The distinction between mere influence or access, as addressed by Citizens United, and
     improper influence or access goes to the very heart of representative democracy. It is one thing to
     gain access to a legislator in order to influence him or her with a policy argument. Indeed, we
     presume that legislators are influenced by the ideological views of their constituents. It is entirely
     different to seek to influence a legislator with money in the hope of receiving a contract; such
     influence is de facto improper and corrupting.

                                                        24
 1   long as election campaigns are financed by private contributions or

 2   expenditures”). In other words, because the scope of quid pro quo corruption

 3   can never be reliably ascertained, the legislature may regulate certain

 4   indicators of such corruption or its appearance, such as when donors make

 5   large contributions because they have business with the City, hope to do

 6   business with the City, or are expending money on behalf of others who do

 7   business with the City.

 8         Furthermore, such donations certainly feed the public perception of

 9   quid pro quo corruption, and this alone justifies limitations or perhaps an

10   outright ban. 130 S. Ct. at 908, 910. When those who do business with the

11   government or lobby for various interests give disproportionately large

12   contributions to incumbents, regardless of their ideological positions, it is no

13   wonder that the perception arises that the contributions are made with the

14   hope or expectation that the donors will receive contracts and other favors in

15   exchange for these contributions. The threat of quid pro quo corruption in

16   such cases is common sense and far from illusory. See, e.g., NCRL v. Bartlett,

17   168 F.3d 705 (4th Cir. 1999) (upholding prohibition on in-session lobbyist

18   contributions); Blount v. S.E.C., 61 F.3d 938 (D.C. Cir. 1995) (upholding SEC

19   Rule that prohibits municipal securities brokers and dealers from engaging in

20   municipal securities business for two years after contributing more than $250

                                            25
 1   to state officials from whom they obtain business); cf. United States v.

 2   Harriss, 347 U.S. 612 (1954) (dismissing a First Amendment challenge to a

 3   lobbying disclosure act).

 4         Indeed, the Supreme Court recently attributed the particular threat of

 5   corruption posed by campaign contributions to the risk of mixing money and

 6   politics. Bennett, 131 S. Ct. at 2826 (observing that “'the use of personal

 7   funds reduces the candidate's dependence on outside contributions and

 8   thereby counteracts the coercive pressures and attendant risks of abuse' of

 9   money in politics” (quoting Buckley, 424 U.S. at 53)). Doing business

10   contributions mix money and politics on both ends of the equation, making

11   them that much more risky and questionable. Contributions to candidates for

12   City office from persons with a particularly direct financial interest in these

13   officials' policy decisions pose a heightened risk of actual and apparent

14   corruption, and merit heightened government regulation. Mere access or

15   influence based on independent corporate speech, therefore, is not the concern

16   here. This is so even though the record occasionally also speaks to the

17   presence of mere “influence.”

18         Appellants argue that Green Party requires evidence of recent scandals

19   in order to justify any contribution restriction, not just a ban. (See Letter of

20   July 14, 2010). This is not what Green Party says. There is no reason to

                                             26
 1   require the legislature to experience the very problem it fears before taking

 2   appropriate prophylactic measures. See Citizens United, 189 S. Ct. at 908

 3   (noting the preventative nature of contribution limits because the scope of

 4   quid pro quo corruption “‘can never be reliably ascertained’” and those

 5   instances that are known are covered by bribery laws (quoting Buckley, 424

 6   U.S. at 27)); see also Anthony W. Crowell, New Lobbying Laws: More

 7   Sunlight, More Teeth, 12 CityLaw 73, 73 (July/Aug. 2006) (noting that recent

 8   Washington scandals involving lobbyist Jack Abramoff, former

 9   Representative Randy Cunningham, and Representative William Jefferson

10   “illustrate the potential for corrupt lobbying to erode citizens’ faith in their

11   government” and that New York City enacted reforms, including making

12   lobbyist contributions ineligible for matching with public funds, to enhance

13   integrity and transparency in municipal government, “[r]ather than waiting

14   for New York City to see its own lobbyist scandals”). Appellants essentially

15   propose giving every corruptor at least one chance to corrupt before anything

16   can be done, but this dog is not entitled to a bite. Green Party only

17   considered whether an outright contribution ban was closely drawn to the

18   anti-corruption interest. As to limits, Green Party set the justificatory

19   burden somewhere between a concrete showing of actual quid pro quo




                                             27
 1   corruption and the sort of “mere conjecture” that the Supreme Court has

 2   deemed out of bounds. Shrink Missouri, 528 U.S. at 379.

 3         Indeed, as the district court reasoned, Ognibene, 599 F. Supp. 2d at 448

 4   n.12, to require evidence of actual scandals for contribution limits would

 5   conflate the interest in preventing actual corruption with the separate

 6   interest in preventing apparent corruption. In other words, if every case of

 7   apparent corruption required a showing of actual corruption, then the former

 8   would simply be a subset of the latter, and the prevention of actual corruption

 9   would be the only legitimate state interest for contribution limits. Green

10   Party is consistent with Supreme Court precedent rejecting this argument,

11   due to the difficulty of detecting actual corruption and the equal importance

12   of eliminating apparent corruption. See McConnell, 540 U.S. at 153; Buckley,

13   424 U.S. at 27.

14         Appellants do not dispute that the generally applicable contribution

15   limits responded to actual pay-to-play scandals in New York City in the

16   1980's. (Appellant Br. 4-5.) Rather, they argue that these initial limits have

17   been successful, so that lower limits are unnecessary. This determination,

18   however, is a matter of policy better suited for the legislature, which has

19   institutional expertise in the field of election regulation and effectively curbed

20   these scandals in the first place. See, e.g., Randall, 548 U.S. at 248 (“[W]e

                                             28
 1   have no scalpel to probe each possible contribution level. We cannot

 2   determine with any degree of exactitude the precise restriction necessary to

 3   carry out the statute's legitimate objectives. In practice, the legislature is

 4   better equipped to make such empirical judgments, as legislators have

 5   particular expertise in matters related to the costs and nature of running for

 6   office. Thus ordinarily we have deferred to the legislature's determination of

 7   such matters.” (internal citations and quotations omitted)); Fed. Election

 8   Comm’n v. Nat’l Conservative Political Action Comm., 470 U.S. 480, 500

 9   (1985) (noting Buckley's “deference to a congressional determination of the

10   need for a prophylactic rule where the evil of potential corruption had long

11   been recognized”); Fed. Election Comm’n v. Nat’l Right to Work Comm., 459

12   U.S. 197, 210 (1982). There is no doubt that the threat of corruption or its

13   appearance is heightened when contributors have business dealings with the

14   City, for the reasons just discussed. Accordingly, it is reasonable and

15   appropriate to further limit their contributions.

16         In addition, it is clear that the City Council properly studied this issue

17   before concluding that doing business contributions are particularly

18   problematic and merit special treatment. The record contains several reports

19   and investigations–including the 1998 Commission Report, the 2005 Election

20   Report, the 2006 interim report of a study conducted by students at New York

                                             29
 1   University’s Wagner Graduate School of Public Service, and the Committee

 2   on Governmental Operations’ Reports on the challenged laws–all of which

 3   attest to the significant role that “doing business” contributions play in

 4   elections and in the public perception of corruption. For example, “doing

 5   business” contributors were more likely to give large rather than small

 6   donations, and disproportionately contributed to incumbents–who are

 7   considered to have greater influence on city decisions–than to challengers.

 8   2005 Election Report, 122; see also Pines Decl., Ex. II, Deposition of Martin

 9   Malave Dilan at 33-34 (testifying that contributors who do business with the

10   City favor incumbent candidates); Pines Decl., Ex. NN, Deposition of Marlene

11   J. Tapper at 63 (same); Pines Decl., Ex. OO, Deposition of Viviana Vazquez-

12   Hernandez at 44 (same). In 2001 and 2005 respectively, donors with business

13   dealings were 3.8% and 5.3% of all contributors, but accounted for 25.2% and

14   21.5% of dollars contributed. Based on this evidence, it was entirely

15   appropriate for the Council to find that there is an appearance that larger

16   contributions are made to secure the contract, land use approval, or whatever

17   municipal benefit is at issue.




                                            30
1          Moreover, there is direct evidence of a public perception of corruption.15

2   While Appellants pretend to be skeptical, their assertions are not credible.

3   Not only is the connection between money and municipal action objectively

4   reasonable, but their own deposition testimony confirms that the public

5   perceives this connection to exist. See, e.g., Pines Decl., Ex. II, Deposition of

6   Martin Malave Dilan at 33-34; Pines Decl., Ex. JJ, Deposition of Thomas V.

7   Ognibene at 31-32; Pines Decl., Ex. LL, Deposition of Fran Reiter at 52; Pines

           15
               Although Green Party does not require actual incidents of corruption to sustain
    contribution limits (as opposed to bans), 616 F.3d at 207 & n.15, it is no wonder there is a public
    perception of corruption, given the recent scandals involving exchanges of money for favors. See, e.g.,
    Nicholas Confessore & Danny Hakim, Bruno is Guilty of Corruption in Federal Case, N.Y. Times,
    Dec. 8, 2009, at A1; Kareem Fahim, Seeking Free Home, Ex-Legislator Will Get a Prison Cell
    Instead, N.Y. Times (June 13, 2008), available at
    http://www.nytimes.com/2008/06/13/nyregion/13gordon.html; John Kifner, Velella, Bronx
    Powerhouse, is Sentenced to a Year in Jail, N.Y. Times, June 22, 2004, at B10; Colin Moynihan, State
    Senator and 7 Others Plead Not Guilty to Corruption, N.Y. Times, Apr. 12, 2011, at A22; Stacey
    Stowe, Rowland Home After Serving 10 Months in Corruption Case, N.Y. Times (Feb. 14, 2006),
    available at http://www.nytimes.com/2006/02/14/nyregion/14rowland.html?ref=johngrowland. No
    great logical leap is necessary to infer that opportunities for further, campaign-related corruption
    should be minimized. Moreover, several recent scandals have specifically involved pay-to-play
    campaign donations. See, e.g., Danny Hakim & William K. Rashbaum, Hevesi Pleads Guilty in
    Pension Case, N.Y. Times, Oct. 7, 2010 (reporting on former New York State Comptroller’s approval
    of a pension investment in exchange for, inter alia, $500,000 in campaign contributions); Tom
    Precious, Scandal Over Downstate Casino Jolts Albany, Buffalo News, Oct. 22, 2010; see also
    Nicholas Confessore, Albany Inquiry Ends in Penalty for a Lobbyist, N.Y. Times, Dec. 8, 2010,
    available at http://www.nytimes.com/2010/12/09/nyregion/09lobby.html (implicating a lobbyist in the
    same Comptroller’s pay-to-play scheme).
            All of these incidents occurred in the New York State area. While none implicates an elected
    New York City official, the public is not as parsing as Appellants would hope. The City Council need
    not wait for this outbreak to infect its own members, so that the public may specifically lose faith in
    that legislative body, as well. Ranging from before 2006–when the first of the challenged laws
    passed–to the present, these scandals have created a climate of distrust that feeds the already-
    established public perception of corruption. Appellants argue that the City may, in defending the
    law, rely only on those scandals that predate it. To consider only the scandals that predate the law
    would lead to an absurd result in cases, unlike this one, where a history of actual corruption is
    required (e.g., a ban): If the law were struck down as a result, the Council could immediately pass the
    exact same law, citing the exact same scandals which now would be prior to the passage of the law,
    and that law would be upheld.

                                                      31
 1   Decl., Ex. NN, Deposition of Marlene J. Tapper at 63; Pines Decl., Ex. OO,

 2   Deposition of Viviana Vazquez-Hernandez at 43-44. Appellant Tom Ognibene

 3   acknowledges the usual public perception of office holders and candidates for

 4   office: “You’re all a bunch of crooks.” (Pines Decl., Ex. JJ, Deposition of

 5   Thomas V. Ognibene at 32). The fact that City voters passed the referendum

 6   approving these reforms speaks powerfully to the public perception that

 7   further regulation of campaign contributions by those who do business with

 8   the City is needed.16 See Shrink Missouri, 528 U.S. at 393-94 (“And although

 9   majority votes do not, as such, defeat First Amendment protections, the

10   statewide vote on Proposition A certainly attested to the perception relied

11   upon here . . . .”). In these circumstances, where people believe that many

12   public officials are corrupt, and there is substantial and material evidence to

13   support that belief, clearly the public may enact preventative measures to

14   address the contaminating belief that everything is for sale and to restore

15   faith in the integrity of the political process.




            16
                Appellants argue that the question posed in the 1998 Referendum–whether “requiring
     disclosure and regulation of contributions by those doing business with the City of New York should
     be adopted”–was misleadingly worded because it implies that such contributions were not already
     regulated. The plain inference to be drawn from this question, however, is whether such
     contributions should be further regulated and separately disclosed, not simply as a contribution but
     as a contribution from one who does business with the City. Indeed, this question was well-crafted to
     pinpoint the propriety of “doing business” as a measure of potential corruption.

                                                      32
 1         Appellants assert several rationales for why these provisions are not

 2   closely drawn. First, they assert that they are overbroad because they ban

 3   legitimate as well as corrupt acts. Buckley expressly rejected a similar

 4   argument because “[n]ot only is it difficult to isolate suspect contributions,

 5   but more importantly, Congress was justified in concluding that the interest

 6   in safeguarding against the appearance of impropriety requires that the

 7   opportunity for abuse inherent in the process of raising large monetary

 8   contributions be eliminated.” 424 U.S. at 29-30, 27-28 (also noting that “laws

 9   making criminal the giving and taking of bribes deal with only the most

10   blatant and specific attempts of those with money to influence governmental

11   action”); see also Ward v. Rock Against Racism, 491 U.S. 781, 798 (1989)

12   (holding that a regulation of protected speech may be narrowly tailored even

13   if it is not the least restrictive or least intrusive means). These provisions

14   aim at eliminating, not only corrupt acts, but the appearance of corruption.

15   They are not overbroad. Rather, the limits are tailored to apply only to those

16   who seek a benefit from the City; and, even then, only to those business

17   dealings more likely linked to corruption (i.e., high value business

18   transactions, and lobbyists, whose sole purpose is to influence City outcomes).

19         Appellants also argue that these restrictions are underinclusive

20   because they do not apply to all contributors with the influence and incentive

                                             33
 1   to engage in pay-to-play, specifically labor organizations and neighborhood

 2   associations that do not have procurement contracts which qualify as

 3   business dealings (e.g., the Little League that wants a park to play its

 4   baseball games, contending with a soccer league that wants the same park at

 5   the same time). A statute is not, however, “invalid under the Constitution

 6   because it might have gone farther than it did.” Buckley, 424 U.S. at 105; see

 7   also Blount, 61 F.3d at 946 (“Because the primary purpose of

 8   underinclusiveness analysis is simply to ensure that the proffered state

 9   interest actually underlies the law, a rule is struck for underinclusiveness

10   only if it cannot fairly be said to advance any genuinely substantial

11   governmental interest” (internal quotations and citations omitted)). The fact

12   that the City has chosen to focus on one aspect of quid pro quo corruption,

13   rather than every conceivable instance, does not render its rationale a

14   “challenge to the credulous.” Republican Party of Minnesota v. White, 536

15   U.S. 765, 778 (2002). The limits decided upon are not unreasonable and

16   appear to be based on common sense. They focus on misconduct that flows

17   from business dealings with the City and include labor organizations and

18   neighborhood associations that do business with the City.17 In the 2001 and


             17
               Furthermore, labor unions are different. Unlike contractors, they are the statutory
     representatives of a group of municipal employees and, as such, are allowed under State law to
     bargain collectively and to obtain contracts. If it cannot negotiate a contract, one will be imposed by

                                                        34
 1   2005 election cycles, groups defined as “doing business” with the City gave a

 2   total of about $25 million to citywide candidates while unions and labor-

 3   related PACs gave only about $4.1 million or sixteen percent of that total.

 4   (LaRue Decl. Ex. E, New York Times, New Campaign Finance Rules Skip

 5   Unions, June, 28, 2007.) Accordingly, the City Council’s choice of definition

 6   for “business dealings” effectively captures the biggest contributors. The

 7   provisions are not, therefore, underinclusive of their stated purpose.

 8          Appellants additionally contend that these provisions are overinclusive

 9   because they may be applied using the broader definition of “lobbyist.”

10   Appellees concede, however, that the narrower definition applies. (Appellee’s

11   Br. 11 n.5). This narrower definition comports with, and is no broader than

12   necessary to address, the interest in eliminating actual and perceived

13   corruption. Appellants acknowledge that the public perceives lobbyists as

14   influencing or attempting to influence elected officials through their

15   campaign contributions. (See Pines Decl., Ex. LL, Deposition of Fran Reiter

16   at 52; Pines Decl., Ex. NN, Deposition of Viviana Vazquez-Hernandez at 44.)

17   Accordingly, the inclusion of people and organizations engaged in lobbying

18   activities does not render these provisions overinclusive.



     an impasse panel. To the extent that they do business in the sense that others do, they are included
     in the lower limits.

                                                      35
 1         Appellants further assert that these provisions are poorly tailored

 2   because they are not indexed for inflation and discriminate based on

 3   viewpoint. The mere failure to index for inflation, however, does not compel a

 4   finding that the provisions are not closely drawn. Randall pointed to the

 5   failure to index for inflation as only one of five factors which, taken together,

 6   led to its conclusion that certain contribution limits violated the First

 7   Amendment. See 548 U.S. at 253-263 (also weighing the fact that the limits

 8   applied to contributions by political parties and included volunteers’

 9   expenses). But the real problem in Randall was that the limits were so low

10   that a candidate could not communicate meaningfully with constituents. But

11   limits challenged here apply only to certain contributions and for citywide

12   elections; and they are not as “suspiciously low” as those in Randall. Id. at

13   261; see also Green Party, 616 F.3d at 205 (noting that a limit of $50 per

14   election would effectively address the problem of actual corruption without

15   “wholly extinguish[ing] a contractor’s actual associational rights”).

16   Appellants do not provide any evidence that the reduced dollar amount which

17   can be contributed prevents the running of a competitive campaign.

18   Furthermore, Randall was concerned that such low limits would “magnify the

19   advantages of incumbency to the point where they put challengers to a

20   significant disadvantage.” 548 U.S. at 248. The doing business limits here,

                                             36
 1   however, have the opposite effect; they seek to avoid stacking the deck in

 2   favor of incumbents, to whom donors with business dealings

 3   disproportionately contribute.

 4          Viewpoint discrimination is a subset of content discrimination in which

 5   the government impermissibly targets, not the subject matter itself, but

 6   rather particular views taken on the subject. See Rosenberger v. Rector &

 7   Visitors of Univ. of Va., 515 U.S. 819, 829, 831 (1995); Make the Road by

 8   Walking, Inc. v. Turner, 378 F.3d 133, 150 (2d Cir. 2004). Appellants argue

 9   that the challenged provisions discriminate based on viewpoint because

10   neighborhood, community, and labor organizations, which are not necessarily

11   subject to the doing business limitations, share a significantly different

12   viewpoint than do business owners and members of management. Appellants

13   have failed, however, to offer any evidence that these organizations share a

14   single viewpoint.18 While a neighborhood association may have a different

15   mission than a construction business, their interests may be precisely aligned

16   on a particular project. It also does not follow that all neighborhood

17   associations are monolithic. What flies in Bedford-Stuyvesant may not work

18   in Harlem, and what works on Park Avenue may not work on the Bronx


            18
               We do not consider Mr. Ognibene’s unsupported estimation that ninety-nine percent of
     union contributions go to Democratic candidates to be sufficient evidence of viewpoint discrimination.
     (See Pines Decl. Ex. JJ, at 12.)

                                                      37
 1   Champs-Elysees–the Grand Concourse. Since Appellants do not specify what

 2   these viewpoints are, it is difficult to say what is being excluded. But the

 3   experience in New York dictates the conclusion that neighborhood,

 4   community, and labor organizations do not share a single viewpoint. Nor do

 5   business owners.19

 6                               D. Non-Matching Provisions

 7          Sections 3-702(3) and 3-703(1-a) exclude contributions from individuals

 8   subject to the lower doing business limits, including lobbyists, as well as

 9   contributions from any other person required to be included in a lobbyists’

10   statement of registration from the matching provisions of the public financing

11   scheme. Non-matching does not prevent someone from making a

12   contribution, but it does minimize the value of that contribution. In this

13   respect, it is similar to a limit and subject to the less stringent standard of

14   review. For the reasons discussed, the non-matching provision is closely

15   drawn to address a sufficiently important governmental interest.

16          The public financing scheme generously matches eligible contributions

17   of up to $175 using tax dollars at the rate of 6 to 1. The program encourages

18   small, individual contributions, and is consistent with Randall’s interest in



            19
              Appellants’ facial Fourteenth Amendment challenge that the provisions effect
     impermissible viewpoint discrimination fails for the same reason.

                                                    38
 1   discouraging the entrenchment of incumbent candidates. See Randall, 548

 2   U.S. at 248; Crowell, supra, at 77 (noting the public financing scheme’s

 3   “purpose of encouraging grassroots fundraising and diminishing the influence

 4   of special interests”). When participation is voluntary and public money is

 5   used, stricter restrictions may be imposed, perhaps even restrictions that

 6   would normally be impermissible. See Davis, 554 U.S. at 739-40. Candidates

 7   who choose not to participate, and their contributors, are not prevented from

 8   freely expressing their political speech and associations; the legislature has

 9   merely decided not to amplify their contributions with tax dollars. That

10   decision is entirely permissible. Buckley held that Congress “may engage in

11   public financing of election campaigns and may condition acceptance of public

12   funds on an agreement by the candidate to abide by specified expenditure

13   limitations.” 424 U.S. at 57 n.65; see Bennett, 131 S. Ct. at 2828. As in

14   Buckley, “by forgoing public financing, . . . [the candidates here] retain the

15   unfettered right” to receive contributions within the limits from lobbyists,

16   persons associated with lobbyists, and other individuals with business

17   dealings with the City. Davis, 554 U.S. at 739.

18         The matching provision at issue here is clearly distinguishable. First,

19   it applies to contribution limits, which the Supreme Court has recognized to

20   be less onerous restrictions on speech than campaign expenditure limits.

                                            39
 1   Second, while the matching provisions here may burden the candidates who

 2   choose to participate in the public financing scheme, the provision in Bennett

 3   substantially burdened nonparticipating candidates, effectively forcing them

 4   to put money in their opponent's campaign coffers. Id. at 2819. Third, unlike

 5   the provisions challenged in Bennett and Davis, New York City's scheme does

 6   not impose different limits on different candidates. Davis, 554 U.S. at 738

 7   (“We have never upheld the constitutionality of a law that imposes different

 8   contribution limits for candidates who are competing against each other.”)

 9   Certain contributors—those with direct financial stakes in the elected

10   candidate's decisions—are treated differently, see infra Part III.D; but the

11   way in which these contributors are treated differently is the same for all

12   candidates.

13         Additionally, the use of the broader definition of lobbyist for non-

14   matching purposes does not render it overinclusive. Insofar as the provision

15   reaches some contributors peripheral to the business dealings, such as a

16   lobbyist’s secretary or spouse, it does so only to prevent circumvention and

17   does not form “a substantial portion of the burden on speech.” Turner

18   Broadcasting System, Inc. v. F.C.C., 512 U.S. 622, 682 (1994) (quoting Ward,

19   491 U.S. at 798); Interim Report, at 30 (providing examples of how “a

20   contribution through a spouse with the same last name is one potential way

                                            40
 1   to circumvent donation limits while guaranteeing the contribution is

 2   associated with the family name”). Otherwise, lobbyists will continue to do

 3   what they are doing now–giving money.20 Indeed, use of the broader

 4   definition for non-matching purposes combats circumvention, while use of the

 5   narrower definition of lobbyist for the lower contribution limits avoids

 6   infringing the speech of people not actually engaged in lobbying activities.

 7   This distinction is an appropriate balancing of these competing concerns.

 8                                                  E. Entity Ban

 9            The Supreme Court has held that “the degree of scrutiny turns on the

10   nature of the activity regulated,” not on the fact that contributions are

11   outright banned, as opposed to just limited. Beaumont, 539 U.S. at 161-62.

12   Accordingly, the more lenient standard of review also applies to the entity

13   ban. On the other hand, the analysis of whether a restriction imposes a ban

14   or merely a limit is relevant to the closely drawn analysis. See Green Party,

15   319 F.3d at 206-07.




              20
                For example, a plaintiff in this proceeding, who is the spouse of a lobbyist, testified that she had no
     knowledge of a contribution made jointly on her and her husband’s behalf to a candidate who is unknown to her.
     See Pines Decl., Ex. GG, Deposition of Sheila Andersen-Ricci at 8 (“Q: Have you ever made [or directed anyone to
     make] any contributions to any candidates for political office in your lifetime? A: No.”), 32-33 (“Q: To the best of
     your understanding who is Thomas White? A: I don’t know.); Horowitz Decl. ¶ 4 (discussing a check drawn on the
     account of Ms. Andersen-Ricci and her husband, payable to “Friends of Tom White, Jr.,” in the amount of
     $500–twice the limit for a single contribution).

                                                              41
 1           Beaumont recognized four justifications for the federal ban on corporate

 2   contributions: (1) the anti-corruption interest already discussed, 539 U.S. at

 3   154; (2) the anti-distortion interest, stemming from the “special

 4   characteristics of the corporate structure that threaten the integrity of the

 5   political process . . . [by] permit[ting] them to use resources amassed in the

 6   economic marketplace to obtain an unfair advantage in the political

 7   marketplace,” id. at 153-54 (internal quotations omitted); (3) the dissenting-

 8   shareholder interest in protecting individuals’ investments in the corporation

 9   from being used to support political candidates these individuals might

10   oppose, id. at 154; and (4) the anti-circumvention interest in preventing the

11   evasion of valid contribution limits. Id. at 155. Since the anti-corruption and

12   anti-circumvention interests adequately justify the entity ban, we do not

13   consider the extent to which the other rationales may apply.21


             21
                Citizens United preserves the anti-corruption justification for regulating corporate
     contributions, based on its clear distinction between expenditures and contributions, and the lack of
     an express rejection of the corporate ban, which has existed since the first federal campaign finance
     law in 1907. 1998 Commission Report, 16. The Court is aware of United States v. Danielczyk, No.
     1:11cr85 (JCC), 2011 WL 2161794 (E.D. Va. May 26, 2011), which struck down a ban on corporate
     contributions, based on what it called an “inescapable” expansion of Citizen United’s logic. Id. at *18;
     Danielczyk, 2011 WL 2268063 (E.D. Va. June 7, 2011) (denying reconsideration). The role of an
     appellate court is to apply to law as it exists. Since the Supreme Court reaffirmed the validity of the
     100-year old corporate ban just 8 years ago, Beaumont, 539 U.S. at 154-55, and declined to overrule
     this holding in Citizens United, this Court will not do so here. Indeed, Citizens United confirms that
     the anti-corruption interest is a legitimate justification for campaign contribution restrictions.
             Citizens United also does not disturb the validity of the anti-circumvention interest. See
     Thalheimer v. City of San Diego, Nos. 10-55322, 10-55324, 10-55434, 2011 WL 2400779, at *13 (9th
     Cir. Jun. 9, 2011) (concluding that “nothing in the explicit holdings or broad reasoning” of Citizens
     United invalidates the anti-circumvention interest in the context of contribution limits); Minn.
     Citizens Concerned for Life, Inc. v. Swanson, 640 F.3d 304, 318 (8th Cir. 2011), vacated on July 12,

                                                       42
 1          The anti-corruption rationale presents a sufficiently important

 2   governmental interest for the reasons already discussed, and applies equally

 3   to LLCs, LLPs, and partnerships, as to corporations. In addition, the

 4   organizational form of an LLC, LLP, and partnership, like a corporation,

 5   creates the opportunity for an individual donor to circumvent valid

 6   contribution limits.22 See Beaumont, 539 U.S. at 155, 157 (noting that

 7   National Right to Work, 459 U.S. 197 rejected the argument that the

 8   rationale for the corporate contribution ban “turns on the details of the

 9   corporate form,” as opposed to similar organizational structures); Colo.

10   Republicans, 533 U.S. at 456 & n.18, 457 (noting that “contribution limits

11   would be eroded if inducement to circumvent them were enhanced”).

12          The record contains sufficient evidence from which one could infer

13   circumvention and perceive corruption. For example, these entities have

14   become more active contributors since the corporate ban; LLC contributions

15   more than doubled from 2.8% in the 2001 election to 6.2% in the 2005



     2011 for rehearing en banc (“Citizens United never doubted the government's strong interest in
     preventing quid pro quo corruption or materially questioned the ability of corporations to serve as
     conduits for circumventing valid contributions limits.”). As a result, the Court need not consider the
     extent to which the entity ban could have been justified by the anti-distortion and dissenting-
     shareholder rationales, which Citizens United rejected with respect to independent corporate
     expenditures.
             22
                Since the entity ban is justified both by anti-corruption and anti-circumvention interests,
     and simply extends the already-existing corporate ban to other functionally similar entities, Green
     Party’s requirement of a recent history of actual corruption does not apply.

                                                       43
 1   election.23 2005 Election Report, at 121. Most compelling is the

 2   overwhelming percentage of contributions from such entities for incumbent

 3   candidates.24 While the rise in contribution activity could be attributed to

 4   innocent causes, the grossly disproportionate support for candidates based

 5   not on ideology or voting record, but rather on their relative position of power

 6   and ability to return favors, creates the appearance of impropriety.

 7          Entity contributions also undermine the CFA’s goal of transparency,

 8   because they only have to be attributed to the partner or owner when they

 9   exceed $2,500. Committee Report, 29. Transparency is a particular problem

10   for LLCs because many are involved in city business, especially land use, yet

11   there are minimal disclosure requirements and often no publicly available

12   information about the owners.25 See 2005 Election Report, at 121; see also

            23
                 Following the ban on corporate contributions, organizational contributions rose from
     thirteen percent in 2001 to sixteen percent in 2005. 2005 Election Report, at 121.
              24
                 In the 2005 election, the average incumbent collected seventy-eight contributions from
     organizations, totaling $43,500, whereas challengers averaged only two contributions, totaling
     $1,800. Id. at 120.
              25
                 New York State Senator Daniel Squadron stated that the LLC loophole effectively means
     that “you don’t have contribution limits.” Gearty & Lesser, supra. The following examples
     demonstrate how easily campaign contribution can be bundled to circumvent limits: (1) a real estate
     developer, his wife, and two executives from his LLC all gave maximum contribution to the same
     incumbent candidate for City Council, see Interim Report, at 32-33; (2) the same developer, his
     immediate family, his LLC, and officers of his LLC contributed nearly $100,000 in the 2001 and 2005
     City election cycles, id. at 32; (3) two real estate developers and their newly-formed LLC gave nearly
     ten times the amount of donations they had given in the past after initiating a particular project, id.
     at 35; (4) the owner of a parent company of the construction company that received a contract to build
     a major transportation hub in Manhattan, his children, and the owner of the parent company’s
     marketing firm all gave significant contributions to an incumbent candidate for Borough President.
     See generally Doing Business Portal, http://www.nyc.gov/html/doingbiz/home.html (last visited Aug,
     10, 2011). The lack of disclosure requirements for LLCs makes it especially difficult to track the
     extent of bundling that occurs.

                                                       44
 1   Robert Gearty & Benjamin Lesser, So-called 'LLCs' Enable Real Estate

 2   Giants to Give Huge Sums to Gov. Paterson, AG Andrew Cuomo, N.Y. Daily

 3   News (Feb. 15, 2010), available at http://articles.nydailynews.com/2010-02-

 4   15/news/27056260_1_llc-money-limit-individual-donations-contributions

 5   (citing examples of how contributors evade the contribution limits by

 6   donating through LLCs—“the mother of all loopholes”—which are still

 7   permitted in New York State).

 8          The pressing question here is whether the entity ban is closely drawn.26

 9   We hold that it is. The expansion of the corporate ban to include these

10   entities does not render it overinclusive because, as noted, the legal

11   distinctions between these entities and corporations do not make them less of

12   a threat of corruption or circumvention.

13          For the reasons that justify the corporate contribution prohibition,

14   therefore, the legislature permissibly determined that there is no room in



            26
                The Court rejects Appellants’ argument that the entity ban is underinclusive because it
     does not apply to contributions from doctors, lawyers, and Certified Public Accountants. The LLC,
     LLP, and partnership forms pose a risk of circumvention, not because of the nature of the profession
     for which they are organized, but because they create the opportunity for the same individuals to
     contribute up to the limits more than once–as an individual and again as an entity. Because
     Appellants do not provide any connection between these professions and the risk of corruption, this
     argument is unpersuasive. Moreover, their argument appears to be based on a misunderstanding of
     §3-703(1)(l)’s statement that the mere fact that a contributor’s name is followed by a professional
     designation such as “M.D.,” “Esq.,” or “C.P.A.,” does not cause the contribution to fall within the
     entity ban. This does not mean that a contribution from an LLC, LLP, or partnership consisting of
     doctors or lawyers would be exempt, but rather warns against the overapplication of the entity ban to
     individuals who hold such professional titles.

                                                      45
1   City campaigns for entity contributions. While limits may minimize

2   circumvention and the appearance of corruption, the City is free to decide

3   that these evils must be eliminated to ensure the public’s faith in the

4   electorate system.

5                                  CONCLUSION

6         For the foregoing reasons, we AFFIRM the judgment of the district

7   court upholding the constitutionality of the contribution limits, non-matching

8   provision, and entity ban.




                                           46
 1    CALABRESI, J., concurring:

 2    As Jesus looked up, he saw the rich putting their gifts into the temple treasury. He also saw a
 3    poor widow put in two very small copper coins. “Truly I tell you,” he said, “this poor widow has
 4    put in more than all the others. All these people gave their gifts out of their wealth; but she out of
 5    her poverty put in all she had to live on.”
 6 
 7    Luke 21:1-4.
 8 
 9                  I join the majority opinion because it properly describes and follows the current law of

10    campaign finance. But all is not well with this law, and I believe it appropriate to state in a

11    judicial opinion why I think this is so.

12                  Judge Crotty has performed a careful analysis of corruption (actual and its appearance),

13    and only of corruption, as a ground for upholding the regulations at issue in this case.1 His is the

14    necessary analysis under Supreme Court case law. The High Court has told us that the First

15    Amendment protects the right to speak through the use of money, but that the existence of this

16    right does not prevent governments from enacting campaign finance regulations in furtherance of

17    their interest in limiting actual or apparent corruption. McConnell v. FEC, 540 U.S. 93, 143

18    (2003) (“Our cases have made clear that the prevention of corruption or its appearance

19    constitutes a sufficiently important interest to justify political contribution limits.”). At the same

20    time, the Court has rejected the idea that governments may, by campaign finance regulations,

21    pursue the separate interest in what it has rather derisively called “leveling the playing field.”

22    Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 131 S. Ct. 2806, 2825-26 (2011).

23    That is, under current Supreme Court doctrine, governments cannot defend campaign finance

24    regulations on the ground that such regulations take into account and respond to the different


                                                                  
      1
       Of course, the majority opinion also discusses the state’s “anticircumvention” interest in
      connection with the entity ban, but that interest is largely derivative of the state’s
      “anticorruption” interest.
                                                                                                               1
 1    capacities of the rich and the poor to speak through money; legislatures—the Court has

 2    indicated—have no role to play with respect to that. It is with this position that I wish to take

 3    issue here.2

 4                  I agree completely with the Supreme Court that the First Amendment protects each

 5    person’s right to express political beliefs through money. Where I disagree with the Court is in

 6    its repeated insistence that any recognition of the “level playing field” interest (elsewhere

 7    referred to as the “antidistortion interest,” Citizens United v. FEC, 130 S. Ct. 876, 903 (2010)) is

 8    inconsistent with this right. To the contrary, the antidistortion interest promotes this right in two

 9    important ways. First, it prevents some speakers from drowning out the speech of others. And

10    second, it safeguards something of fundamental First Amendment importance—the ability to

11    have one’s protected expression indicate the intensity of one’s political beliefs. These values,

12    moreover, have not gone unrecognized in underlying First Amendment jurisprudence.

13                  The first benefit of antidistortion measures is not difficult to see. If an external factor,

14    such as wealth, allows some individuals to communicate their political views too powerfully,

15    then persons who lack wealth may, for all intents and purposes, be excluded from the democratic

16    dialogue. In much the same way that anti-noise ordinances help to prevent megaphone users

17    from drowning out all others in the public square, contribution limits can serve to prevent the

18    wealthiest donors from rendering all other donors irrelevant—from, in effect, silencing them. For

19    an articulation of this concern—i.e., that, without regulation, the rich would be able to use their

20    wealth to overwhelm the voices of the poor—one need look no further than the Supreme Court’s

21    decision in Red Lion Broadcasting Co. v. FCC, where, in upholding the FCC’s “fairness

                                                                  
      2
        As the case before us involves contribution restrictions, I will speak primarily of such
      restrictions here. But much of what I say applies with equal force to restrictions on independent
      expenditures.
                                                                                                                   2
 1    doctrine,” the High Court long ago explained that, without the rule in place, “station owners and

 2    a few networks would have unfettered power to make time available only to the highest bidders”

 3    and thereby broadcast only those bidders’ political views. Red Lion Broadcasting Co. v. FCC,

 4    395 U.S. 367, 392 (1969); see also id. at 387 (“Just as the Government may limit the use of

 5    sound-amplifying equipment potentially so noisy that it drowns out civilized private speech, so

 6    may the Government limit the use of broadcast equipment. The right of free speech of a

 7    broadcaster, the user of a sound truck, or any other individual does not embrace a right to snuff

 8    out the free speech of others.”).3 The same is true of contribution limits: Without restrictions on

 9    the size of campaign contributions, the wealthy could flood the campaign coffers of their

10    preferred political candidates, rendering all other contributions negligible by comparison.

11    Contribution limits, like noise ordinances, still allow those who have the capacity a full

12    opportunity to make their speech widely heard—the wealthy remain able to express their views




                                                                  
      3
        The fact that the FCC no longer enforces the fairness doctrine is not relevant to the Court’s
      constitutional analysis in Red Lion. Indeed, what it shows is that bodies other than courts
      (administrative and legislative bodies) are perfectly capable of taking into account the facts and
      circumstances that determine what kinds of speech restrictions are inappropriate, undesirable, or
      even constitutionally problematic. Cf. Syracuse Peace Council v. FCC, 867 F.2d 654, 661 (D.C.
      Cir. 1989) (upholding the FCC’s determination that the fairness doctrine no longer served the
      public interest, and noting, inter alia, the FCC’s conclusions that the doctrine chilled “the
      expression of unorthodox or ‘fringe’ views on controversial issues” and that the doctrine was no
      longer needed in light of the “dramatic increase in broadcasting outlets since [the year of its
      implementation]”). In contrast with the nuanced handling of the issues by the FCC as upheld by
      the D.C. Circuit, courts acting on their own and indulging in undemocratic decisionmaking
      create the danger not only of wrong solutions to difficult constitutional problems, but also of
      rigid answers to questions that by their nature demand flexible, adaptive, and democratically
      informed responses.
                                                                                                            3
 1    forcefully through money—but such limits make sure that this is done only in ways that leave

 2    room for everyone else to do the same.4

 3                  The second benefit of antidistortion measures is perhaps more subtle, but of no less

 4    importance: it relates to the ability of all persons, rich and poor, to express the intensity of their

 5    feelings. In many circumstances, the intensity of a speaker’s expression tells us much about the

 6    intensity of that speaker’s beliefs. Polite applause conveys less enthusiasm than a shouted

 7    “Bravo!” Passing criticisms convey weaker disagreement than passionate harangues. And, of

 8    course, the tone of a judicial opinion provides some indication of how bleakly a judge views a

 9    certain area of the law. But where speech takes the form of a monetary expenditure, the link

10    between intensity of beliefs and intensity of expression, as measured by the amount contributed,

11    can too easily break down. This is a result of the unequal distribution of wealth, which makes the

12    amount of money an individual spends on behalf of a political cause an unreliable measure of the

13    intensity and depth of that individual’s support for the cause. “In other words, and crucially, a

14    large contribution by a person of great means may influence an election enormously, and yet

15    may represent a far lesser intensity of desire than a pittance given by a poor person.” Landell v.

16    Sorrell, 406 F.3d 159, 161 (2d Cir. 2005) (Calabresi, J., concurring in the denial of rehearing en

17    banc), rev’d sub nom. Randall v. Sorrell, 548 U.S. 230 (2006).

18                  To return to the example of the megaphone in the public square, the problem with its

19    loudness is not just that it drowns out the voices of others, but also that it misrepresents, to an

20    outside observer, the relative intensity of the speaker’s views. That is, even if the megaphone


                                                                  
      4
       The same would be true of payments by the government that match or otherwise increase the
      contributions of the poor; that is, rather than putting in noise ordinances, the government might
      prefer to make megaphones widely available.

                                                                                                               4
 1    user cares little about the issue being discussed, his voice gets heard above all others, while the

 2    voices (and intensity of feelings) of those who care passionately about the issue (and shout their

 3    beliefs at the top of their lungs) seem small in comparison. The one speaker’s relative loudness—

 4    along with the other speakers’ relative softness—obscures the depth of each speaker’s views,

 5    thereby degrading the communicative value of everyone’s message.

 6            The foregoing example may seem fanciful, but money is not. And there is perhaps no

 7    greater a distortive influence on the intensity of expression than wealth differences. The wider

 8    the economic disparities in a democratic society, the more difficult it becomes to convey, with

 9    financial donations, the intensity of one’s political beliefs. People who care a little will, if they

10    are rich, still give a lot. People who care a lot must, if they are poor, give only a little. Jesus’s

11    comment about the rich donors and the poor widow says it all. Today, the amount of an

12    individual’s campaign contribution reflects the strength of that individual’s preferences far less

13    than it does the size of his wallet. In this sense, all political donations—by rich and poor alike—

14    lose a crucially important aspect of their communicative value when campaign funds are

15    unrestricted. And that is a problem of profound First Amendment significance.

16            It is no small irony, then, that in refusing to recognize the existence of a state interest in

17    “leveling the playing field”—an interest which prior Supreme Court precedents had suggested

18    was compelling, and certainly is at least legitimate—the Court purports to safeguard “the

19    ‘unfettered interchange of ideas.’” Bennett, 131 S. Ct. at 2826 (quoting Buckley v. Valeo, 424

20    U.S. 1, 14 (1976) (per curiam)). Far from standing in the way of this ideal, the antidistortion

21    interest is vital to its fulfillment. Left unregulated, the “distorting effects of immense

22    aggregations of wealth,” Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990),

23    overruled by Citizens United, 130 S. Ct. at 913, will garble the political debate, trumpeting

                                                                                                               5
 1    voices that would otherwise be muted and muting voices that would otherwise be trumpeted.

 2    Profound wealth differences, in short, make it difficult for speakers to express (and listeners to

 3    discern) the true depths of their feelings. And because wealth inequalities are inevitable, and

 4    indeed, many would say are desirable in their creation of incentives, the only way to ensure a

 5    truly “unfettered interchange of ideas”—an interchange, that is, where each voice is heard in

 6    reasonable proportion to the intensity of the beliefs it expresses—is to give the government some

 7    freedom to mitigate the fettering impact of these inequalities.5

 8                  Indeed, if the Court were correct that the level playing field interest does not provide an

 9    appropriate reason for regulating campaign contributions, then it becomes difficult to see why

10    the First Amendment does not give individuals the right to pay other individuals to vote for

11    candidates in elections. Such a practice need not raise the specter of quid pro quo corruption; one

12    might still buy votes on behalf of one’s preferred candidate even if one could ask nothing from

13    the candidate in return. The critical problem with vote-buying is not corruption; it is rather that

14    allowing the practice would give the wealthiest individuals a huge effect over political elections,

15    making even their relatively minor preferences matter immensely and the possibly intense

16    preferences of the poor matter not much at all. This same concern, of course, explains why a

17    state has a valid interest in leveling the playing field with respect to campaign contributions. Yet,

18    curiously, the Supreme Court seems to accept the validity of vote-buying regulations without


                                                                  
      5
        Moreover, to the extent that campaign contributions cannot be regulated so as to leave them
      free to reflect intensity of feeling, the pressure for greater economic equality will increase, and
      this may be detrimental to those efficiencies that flow from an unequal distribution of wealth. Put
      another way, if campaign finance doctrine fails to recognize the value of a level playing field in
      the political realm, there may arise stronger pressures to create a more level playing field in the
      economy as a whole. The effect of such pressures on incentives and on overall economic
      wellbeing I leave to others to evaluate.
                                                                                                                  6
 1    hesitation, cf. Brown v. Hartlage, 456 U.S. 45, 54-55 (1982), while it refuses to accept the

 2    validity of the antidistortion interest.

 3                  I am not suggesting that expressing the intensity of one’s views is the only thing that

 4    matters in campaign finance doctrine, or in election law more generally.6 Nor am I suggesting

 5    that the playing field must be fully level. This is an area of law in which many considerations

 6    come into play, some of which, such as the dangers of quid pro quo corruption, counsel in favor

 7    of state regulation, while others, such as the dangers of incumbent entrenchment, counsel

 8    against. What specific limitations are and are not appropriate is not for me to say or even to

 9    suggest as a judge.7 They are not the kinds of things courts are suited to decide but instead

10    constitute matters as to which legislative judgment is crucial. What this in turn means is simply

11    stated: So long as the Supreme Court refuses to recognize the importance of the antidistortion

12    interest, and its connection to the ability to express the intensity of one’s feelings, the Court will

13    be ignoring a variable of critical constitutional importance and excluding the most important

14    players—democratically elected legislatures—from their proper role in regard to that variable.

                                                                  
      6
        If it were, we might expect the ballot to be structured so as to give maximum effect to
      preference intensity, through such devices as “cumulative voting” or “single-transferrable
      voting.” See Samuel Issacharoff, Pamela S. Karlan & Richard H. Pildes, The Law of Democracy:
      Legal Structure of the Political Process 1137-75 (3d ed. 2007). Although some jurisdictions have
      experimented with cumulative voting models, see id. at 1163-67, 1172-75, most still adhere to
      the traditional model, in which each individual—regardless of the strength of her preferences—
      may cast one (and only one) vote for one (and only one) candidate per electoral contest. The
      infrequent use of these alternative voting systems does not, of course, demonstrate any lack of
      importance to the expression of preference intensity. It suggests only that, in the context of
      elections, the need to recognize this value is balanced against other considerations.
      7
       In my life as a scholar, I have proposed some solutions to this problem. See, e.g., Philip Bobbit
      & Guido Calabresi, Tragic Choices 98-117 (1978) (discussing wealth-distribution-neutral
      markets); Guido Calabresi, Inaugural Lecture of the Academic Year of the International
      University College (IUC) of Torino: Merit Goods, the Commons, and Their Significance for
      Justice, Efficiency, and Equality (May 19, 2011) (video available at
      http://www.youtube.com/watch?v=iQnLakWMycM).
                                                                                                        7
 1                                              *       *      *

 2           What is at stake here—what everyone knows is at stake here—is what was recognized

 3    and expressed so directly, succinctly, and powerfully in the story of the widow’s mite. The

 4    ability to express one’s feelings with all the intensity that one has—and to be heard—is a central

 5    element of the right to speak freely. It is, I believe, something that is so fundamental that sooner

 6    or later it is going to be recognized. Whether this will happen through a constitutional

 7    amendment or through changes in Supreme Court doctrine, I do not know. But it will happen.

 8    Rejection of it is as flawed as was the rejection of the concept of one-person-one-vote. And just

 9    as constitutional law eventually came to embrace that concept, so too will it come to accept the

10    importance of the antidistortion interest in the law of campaign finance.

11           It is with that faith in a better future, along with an understanding of the requirements of

12    our flawed present, that I join the majority opinion.




                                                                                                             8
Debra Ann Livingston, Circuit Judge, concurring in part and concurring in
the judgment:

        I join in Parts I, II and III.A of the majority opinion. I write separately as

to Part III.B-E only to make clear my disagreement with the majority’s

conclusion that improper or undue influence is a form of corruption that may be

addressed with closely drawn contribution limits. To the extent that this

conclusion is one basis on which the majority upholds the special contribution

limits and non-matching provisions that New York City’s campaign finance law

imposes on those “doing business” with the City, I respectfully disagree with its

analysis.1      I nevertheless conclude that these provisions pass constitutional

muster pursuant to the Supreme Court’s and this Court’s precedents.

Accordingly, I concur in the judgment as expressed in Part III.B-E.

                                                  %%%

        Since the enactment of its Campaign Finance Act (“CFA”) in 1988, New

York City has imposed limits on the amount of money that may be contributed

to a single candidate for public office in a given calendar year.2 These generally

applicable limits are $4,950 to each candidate running for mayor, public

advocate, or comptroller; $3,850 to each candidate running for borough

president; and $2,750 to each candidate running for city council. N.Y.C. Admin.
1
  The majority relies principally on the Supreme Court’s decision in FEC v. Beaumont, 539 U.S. 146
(2003), to uphold the City’s ban on political contributions by partnerships, LLPs, and LLCs. To the
extent it also relies on its conclusion regarding undue influence in reaching this determination, however,
I similarly disagree.
2
  The relevant provision phrases the limits as ceilings on the amount each candidate may accept from
a single contributor. N.Y.C. Admin. Code § 3-703(1)(f). The distinction is not material here.
Code §§ 3-703(1)(f), 3-703(7), 3-719(2)(b); Loprest Decl. ¶ 16. The appellants

here take no issue with these generally applicable limits, but rather with

subsequent limits enacted in 2007 and applicable only to individuals defined in

the CFA as “doing business” with the City of New York. For natural persons

who are classified as “doing business” with the City, significantly stricter limits

apply: $400 to candidates for mayor, public advocate, or comptroller; $320 to

candidates for borough president; and $250 to candidates for city council. N.Y.C.

Admin. Code §§ 3-703(1-a), 3-719(2)(b); Loprest Decl. ¶ 39.

        “Doing business” contributors include, inter alia, individuals with specified

ownership or management roles in entities with valuable City contracts or

grants, or relations with the City that concern the acquisition or disposition of

real property.3 Lobbyists are also included within the stricter contribution

limits. N.Y.C. Admin. Code § 3-702(18)(a). Collective bargaining between the

City and municipal labor organizations, however, does not constitute “doing


3
  The intricacies of the full statutory definition of “doing business” are not relevant here. Generally
speaking, however, “doing business” includes any relationship with the City or its affiliated agencies
involving: (1) contracts valued at $100,000 or more (except for emergency contracts or contracts procured
through competitive bidding), N.Y.C. Admin. Code §§ 3-702(18)(a)(i), 3-703(1-a), 6-116.2(i)(3)(a); (2) the
acquisition or disposition of real property, id. § 3-702(18)(a)(ii); (3) applications for approval for specified
transactions involving office space, land-use plans, or zoning changes, id. § 3-702(18)(a)(iii); (4) certain
concessions and franchises greater than or equal to $100,000, id. § 3-702(18)(a)(iv); (5) grants greater
than or equal to $100,000, id. § 3-702(18)(a)(v); (6) economic development agreements, id. § 3-
702(18)(a)(vi); and (7) contracts for investment of pension funds, id. § 3-702(18)(a)(vii). The “doing
business” limits apply to “any chief executive officer, chief financial officer and/or chief operating officer
of [an entity that has business dealings with the City or an affiliated agency] or persons serving in an
equivalent capacity, any person employed in a senior managerial capacity regarding such entity, or any
person with an interest in such entity which exceeds ten percent of the entity.” Id. § 3-702(20); see also
id. § 3-703(1-a). Generally speaking, an individual is considered to be “doing business” with the City at
the time he or she has actual or pending dealings with the City until a specified period after the
termination of dealings. N.Y.C. Admin. Code § 3-702(18)(b).
business.” Simpson Decl. ¶ 8. Moreover, the statutory text suggests that some

neighborhood and community organizations and their members are not subject

to the contribution limits even when these organizations engage in certain

activities that would otherwise qualify as “doing business” with the City.4

“Doing business” contributors are strictly limited in their contributions as

compared to others: they may donate only approximately one twelfth as much

to a candidate as those who are deemed not to be “doing business” with the City.

Because the “doing business” contribution limits, unlike the regular limits, are

not indexed for inflation, moreover, the disparity between these two sets of limits

is only likely to increase over time. Compare N.Y.C. Admin. Code §§ 3-703(1)(f),

3-703(7) with id. § 3-703(1-a).

        The City also operates a public campaign financing program in which

candidates for the various City offices specified above may choose to participate.

In this program, the City matches the campaign contributions of most

individuals to candidates who participate in the public funding program at a rate

of six to one (with up to $1,050 of public funds available for matching per

contributor per candidate). Id. § 3-705(2)(a); Loprest Decl. ¶ 11. Contributions

from lobbyists or other persons “doing business” with the City, however, are not

eligible      for    matching. 5           N.Y.C.       Admin.        Code       §§     3-702(3)(g)-
4
  These activities involve zoning requests pursuant to N.Y.C. Charter §§ 197-c(a)(3) and 201. See N.Y.C.
Admin. Code §§ 3-702(18)(d), 3-702(20).
5
  Contributions from a lobbyist’s spouse, domestic partner, and unemancipated children are also deemed
ineligible for matching. Id. § 3-702(16). If the lobbyist is an organization, any officer or employee who
engages in lobbying or works for a division of the organization that engages in lobbying, as well as his
(h), 3-703(1-a); Loprest Decl. ¶ 12. Thus, an individual who does not fall into one

of these two categories is entitled, for example, both to contribute $4,950 to a

candidate for mayor and—if the candidate to whom the individual is making a

contribution is participating in the City’s public financing program and is

otherwise eligible to receive matching funds—to have that contribution

supplemented with $1,050 for a total contribution of $6,000.                          The “doing

business” contributor, in contrast, is limited to a contribution of $400 alone.

                                                %%%

       I agree with the majority that the “doing business” contribution limitations

in this case are subject to scrutiny for whether “they are closely drawn to serve

a sufficiently important interest.” Davis v. FEC, 554 U.S. 724, 737 (2008)

(internal quotation marks omitted); see Maj. Op. at 21. The Supreme Court has

repeatedly indicated that, while expenditure limitations are subject to strict

scrutiny, which requires courts to assess whether the challenged “restriction

‘furthers a compelling interest and is narrowly tailored to achieve that interest,’”

Citizens United v. FEC, 130 S. Ct. 876, 898 (2010) (quoting FEC v. Wis. Right to

Life, Inc., 551 U.S. 449, 464 (2007) (opinion of Roberts, C.J.)), contribution limits

are subject to less searching scrutiny because campaign contributions “lie closer

to the edges than to the core of political expression.” FEC v. Beaumont, 539 U.S.

146, 161 (2003); see also Nixon v. Shrink Mo. Gov’t PAC, 528 U.S. 377, 387-88

or her spouse or domestic partner and unemancipated children, are excluded from the matching program.
Id.
(2000); Buckley v. Valeo, 424 U.S. 1, 25 (1976) (per curiam). At the same time,

with regard to contribution no less than expenditure limits, the First

Amendment “has its fullest and most urgent application precisely to the conduct

of campaigns for political office.” Buckley, 424 U.S. at 15 (quoting Monitor

Patriot Co. v. Roy, 401 U.S. 265, 272 (1971)) (internal quotation mark omitted).

The scrutiny required by the First Amendment is thus both “exacting,” see id.

at 16; Shrink Mo., 528 U.S. at 386, and “rigorous,” Buckley, 424 U.S. at 29.

      I likewise agree that the non-matching provisions here are similarly

subject to “closely drawn” analysis.     See Maj. Op. at 38.     At least in the

circumstances in this case, matching funds given to a candidate as a result of a

contribution from a private donor are the functional equivalent of a contribution,

so that limits on such funds are functionally equivalent to contribution limits.

See FEC v. Colo. Republican Fed. Campaign Comm., 533 U.S. 431, 456 (2001)

(determining that “party coordinated spending [is] the functional equivalent of

contributions,” id. at 447, and accordingly applying “scrutiny appropriate for a

contribution limit,” id. at 456). Therefore, this Court must analyze both sets of

provisions to determine whether “they are closely drawn to serve a sufficiently

important interest.” Davis, 554 U.S. at 737 (internal quotation marks omitted).

The City bears the burden of proof in this inquiry. Shrink Mo., 528 U.S. at 387-

88.

                                       %%%
        I part ways with the majority, not in our shared conclusion as to the

constitutionality of the provisions here, but in determining what counts as a

“sufficiently important interest” in relation to which the provisions must be

judged. Pursuant to the Supreme Court’s decision in Buckley, preventing “the

actuality and appearance of corruption” is such an interest. Buckley, 424 U.S.

at 26. The majority, however, goes beyond Buckley in concluding that “improper

or undue influence . . . qualifies as a form of corruption” which may be combated

via closely drawn contribution limits. Maj. Op. at 22-23 (emphases omitted).

Because recent decisions by the Supreme Court and this Court clearly foreclose

this latter determination, I respectfully disagree with it.

        In Citizens United, the Supreme Court unequivocally stated that when

Buckley identified the prevention of corruption or its appearance as “a

sufficiently important governmental interest” to render closely drawn

contribution limits acceptable under the First Amendment, “that interest was

limited to quid pro quo corruption.” 130 S. Ct. at 909 (emphasis added).6 The

Court recognized that favoritism and influence, unlike corruption, are

unavoidable in representative politics, in which a legitimate and substantial


6
 Thus, contrary to the majority’s contention, see Maj. Op. at 23 n.13, the Court’s conclusion in Citizens
United cannot be confined to the context of expenditure limits, even though Citizens United itself
involved such limits, see 130 S. Ct. at 908. Indeed, Buckley’s very determination that preventing quid
pro quo corruption and its appearance (but not real or perceived influence) may justify trenching on First
Amendment freedoms took place in the contribution, not expenditure, context. See Buckley, 424 U.S. at
26-27; see also Citizens United, 130 S. Ct. at 908 (“In Buckley, the Court found this interest [in preventing
corruption and its appearance] ‘sufficiently important’ to allow limits on contributions but did not extend
that reasoning to expenditure limits.”).
reason for casting a ballot or making a contribution “is that the candidate will

respond by producing those political outcomes the supporter favors.” Id. at 910

(quoting McConnell v. FEC, 540 U.S. 93, 297 (2003) (Kennedy, J., concurring in

the judgment in part and dissenting in part), overruled in part on other grounds

by Citizens United, 130 S. Ct. 876). In a democracy premised on responsiveness,

the Court said, the mere fact “that speakers may have influence over or access

to elected officials does not mean that these officials are corrupt.” Id. And

importantly, reliance on a generic influence theory to justify limiting political

speech is, itself, dangerous—“at odds with standard First Amendment analyses

because it is unbounded and susceptible to no limiting principle.” Id. (quoting

McConnell, 540 U.S. at 296 (Kennedy, J., concurring in the judgment in part and

dissenting in part)) (internal quotation mark omitted).

      Even if it were not clear after Citizens United (as, in fact, it is) that First

Amendment freedoms may not be curtailed to address mere influence or the

perception of such influence in the political arena, any question about whether

Citizens United’s pronouncement applies in the context of contribution limits

was resolved by this Court in Green Party of Connecticut v. Garfield, 616 F.3d

189 (2d Cir. 2010). There, the Court addressed the validity of Connecticut’s bans

on campaign contributions to candidates for state office from state contractors

and lobbyists. See id. at 194. Some of the evidence before the Green Party panel

“suggest[ed] that many members of the public generally distrust lobbyists and
the ‘special attention’ they are believed to receive from elected officials.” Id. at

206. This Court said there that “influence and access,” without more, “are not

sinister in nature,” but are part of representative government. 616 F.3d at 207.

Citing Citizens United, the Court held that “evidence demonstrating that

lobbyist contributions give rise to an appearance of ‘influence’ has no bearing on

whether the . . . ban on lobbyist contributions is closely drawn to the state’s

anticorruption interest.” Id. at 207 (citation omitted).

      The majority distinguishes between “mere influence or access to elected

officials” and “improper or undue influence,” suggesting that while the former

may be an insufficient basis on which to limit First Amendment freedoms, the

latter is not. Maj. Op. at 22-23 & n.14. To be clear, if “improper or undue

influence” means nothing more than an appearance of quid pro quo corruption

arising, as Buckley put it, “from public awareness of the opportunities for abuse

inherent in a regime of large individual financial contributions,” 424 U.S. at 27,

I have no quibble with the majority’s position. Citizens United, however, clearly

“rejected a claimed governmental interest ‘in equalizing the relative ability of

individuals and groups to influence the outcome of elections,’ and rejected the

concern over the ‘undue influence’ of money serving as a form of corruption that

justifies regulation.” Samuel Issacharoff, On Political Corruption, 124 Harv. L.

Rev. 118, 125-26 (2010) (quoting Citizens United, 130 S. Ct. at 904). Thus,
contribution limits are acceptable only when they are closely drawn to tackle

real or apparent quid pro quo corruption.

      This is no unimportant point. By requiring that a regulation suppressing

political speech and association be closely drawn to address the threat of quid

pro quo corruption (or the perception that large contributors will secure their

quid), courts strive to draw a principled constitutional line—a line that permits

legislatures to address the significant danger corruption poses to representative

democracy while it vigorously protects political speech by ensuring that First

Amendment principles are enforced.           The generic influence theory is, in

contrast—and as the Citizens United Court recognized—“susceptible to no

limiting principle.” Citizens United, 130 S. Ct. at 910 (quoting McConnell, 540

U.S. at 296 (Kennedy, J., concurring in the judgment in part and dissenting in

part)) (internal quotation mark omitted). Today it disfavors “doing business”

contributors. But all those who seek to influence politicians are vulnerable to

being perceived as having influence that is “undue.” If demonstrating such a

perception is enough to bear the legislature’s First Amendment burden in

justifying restrictions on speech and association, that burden is light indeed.

                                       %%%

      Focusing properly only on the prevention of quid pro quo corruption or its

appearance, I next conclude that the New York City restrictions at issue are

“closely drawn” to serve the interest which justifies the limitations they place on
First Amendment rights. Because I find this question more difficult than my

colleagues, however, I write briefly to explain my position.

      The Supreme Court has not yet addressed the First Amendment

implications of campaign finance laws that impose stricter contribution limits

on the political contributions of some individuals who are seen to pose a

particularly serious threat to the government’s interest in preventing the

appearance or actuality of quid pro quo corruption. Federal law has long

prohibited government contractors from making contributions to “any political

party, committee, or candidate for public office or to any person for any political

purpose or use” while these contractors are seeking or performing pursuant to

a contract. The relevant provision, however—2 U.S.C. § 441c—has not come

before the Court. This Court in Green Party upheld a contribution ban imposed

on Connecticut contractors and related individuals in the wake of a corruption

scandal, 616 F.3d at 205, but invalidated a ban imposed on lobbyists and their

families, finding insufficient evidence to demonstrate that all such contributions

give rise to an appearance of corruption, id. at 206-07. Other courts have upheld

laws limiting in various ways the campaign contributions of casino operators, see

Casino Ass’n of La. v. State ex rel. Foster, 820 So.2d 494 (La. 2002), lobbyists, see

N.C. Right to Life, Inc. v. Bartlett, 168 F.3d 705 (4th Cir. 1999), and municipal

bond traders, see Blount v. SEC, 61 F.3d 938 (D.C. Cir. 1995). But the case law
is relatively sparse, and no case has addressed a set of limits precisely analogous

to those here.

       The law at issue, to survive First Amendment scrutiny, must both serve

the City’s anticorruption interest and be “closely drawn” to achieve this interest.

There is reason to question whether New York City’s “doing business”

restrictions satisfy this test. Thousands of New Yorkers are severely restricted

in the amounts they may contribute or have matched as a result of these

restrictions, some by virtue of no more than a family relationship or their

leadership positions in institutions such as the Metropolitan Museum of Art or

the Cathedral Church of St. John the Divine. See Joseph Goldstein, City

Blacklist     Limits      Giving      by    12,000,      N.Y.     Sun,     August      14,    2008,

http://www.nysun.com/new-york/city-blacklist-limits-giving-by-12000/83868. By

contrast, other New Yorkers who would qualify as “doing business” with the City

under any ordinary understanding of the term (such as those leading municipal

labor unions) are subject only to the higher limits. Furthermore, New York’s law

restricts “doing business” contributions to campaigns for specified City offices

regardless of whether the particular office at stake plays any role in the business

relationship that is the trigger for the stricter limits.7 Despite the magnitude of

the disparity between contributions permitted from the disfavored “doing

7
 For instance, the owner of a small apartment complex with an application pursuant to N.Y.C. Charter
§ 197-c pending before one of New York City’s fifty-nine community boards is tightly restricted in the
amount she may contribute to a candidate running for comptroller, even though the comptroller plays
no role in the approval process outlined in section 197-c. See Karnovsky Decl. ¶¶ 8-27.
business” contributors and the rest of the polity, moreover, in terms of the

amounts they may contribute, there is reason to question whether this stark

difference in treatment is in fact necessary—whether the new limits are more

effective at preventing actual or apparent corruption than the generally

applicable contribution limits that preceded them. Indeed, there is little record

evidence of any quid pro quo corruption involving a New York City official since

the enactment of the generally applicable limits over 20 years ago.8

        The majority relies in part on the “objective[] reasonable[ness]” of “the

connection between money and municipal action” to uphold the strict limits New

York City’s law places upon the free speech and associational rights of those

“doing business.” Maj. Op. at 31. The Supreme Court has stated, however, that

“[w]hen the Government defends a regulation on speech as a means to redress

past harms or prevent anticipated harms, it must do more than simply posit the

existence of the disease sought to be cured. It must demonstrate that the recited

harms are real, not merely conjectural.” Turner Broad. Sys, Inc. v. FCC, 512

U.S. 622, 664 (1994) (plurality opinion) (citation omitted) (internal quotation

marks omitted); see also Colo. Republican Fed. Campaign Comm. v. FEC, 518

U.S. 604, 618 (1996) (opinion of Breyer, J.) (applying Turner in the campaign

finance context); Shrink Mo., 528 U.S. at 392 (“We have never accepted mere
8
  In fact, the Charter Revision Commission (“CRC”) specifically noted in 1998 that since the City enacted
the general limits prohibiting the large contributions of the past, “[g]enerally there is no evidence that
. . . campaign contributions [by those “doing business” with the City] actually influence the award of a
particular contract or passage of a bill.” Pines Decl., Ex. F, Report of the N.Y.C. Charter Revision
Comm’n at 19.
conjecture as adequate to carry a First Amendment burden . . . .”). Requiring the

City to point to evidence demonstrating its anticorruption concern, moreover,

does not amount to “giving every corruptor at least one chance to corrupt.” Maj.

Op. at 27. Reports of recent scandals are one form of evidence that tends to show

corruption or its appearance, see, e.g., Green Party, 616 F.3d at 200, but so do

other forms of evidence, including, inter alia, testimony by those familiar with

the political life of the community, see Shrink Mo., 528 U.S. at 393, and surveys

of the populace, see id. at 394.

         On balance, however, and upon a close examination of the record, I agree

with the majority’s conclusion that the City has adequately demonstrated that

its “doing business” contribution limits address a real and not a conjectural

corruption concern. First, a report prepared for the Campaign Finance Board

(“CFB”) in 2006 reported that those “doing business” with the City tend to give

larger contributions to candidates (albeit within the 1988 contribution limits) as

compared to those lacking such business relationships. See Loprest Decl., Ex.

A, Municipal Campaign Finance and “Pay-to-Play”: An Analysis of Doing

Business Contributions in New York City (“Pay-to-Play Report”) at 12.9 The

Report cites to specific instances of large donations by real estate developers, in

particular, during the very period when matters in which these developers had
9
 The Pay-to-Play Report reaches this conclusion using a different definition than the one eventually adopted by the City,
including only “[f]irms or individuals who are principals of firms who have contracts with the City valued at $100,000
or more[,] and/or . . . [r]egistered lobbyists and lobbyist clients.” Id. at 4. However, the Report’s conclusions still
provide evidence in support of the lowered campaign contributions, since many of the contributors captured under the
Report’s definition would also fall within the CFA’s definition of those “doing business” with the City.
an interest were pending before City authorities. See id. at 31-37. Even without

evidence that such contributions were made in exchange for a quid, they could

well foster the appearance of corruption in City politics. See Buckley, 424 U.S.

at 27 (“Of almost equal concern as the danger of actual quid pro quo

arrangements is the impact of the appearance of corruption stemming from

public awareness of the opportunities for abuse inherent in a regime of large

individual financial contributions.”). Also significant is the fact that New York

City voters in 1998 passed a referendum altering the New York City Charter to

“require[e] disclosure and regulation of contributions by those doing business

with the City of New York.” LaRue Decl., Ex. B, Charter Revision Comm’n’s

Proposal on Campaign Fin. Reform. The Supreme Court has instructed that

such votes may properly be taken as evidence of a perception of corruption that

legislatures may legitimately address. See Shrink Missouri, 528 U.S. at 394.

      Granted, the record also contains troubling indications that at least some

of the proponents of the “doing business” limits may have aimed at curtailing the

influence of “doing business” contributors as much as corruption or its

appearance. See, e.g., Pines Decl., Ex. F. Report of the New York City Charter

Revision Comm’n at 19 (noting that donations by “doing business” contributors

“at a minimum . . . create the perception that [such] donors have the opportunity

and desire to exercise undue influence over elected officials”).             The

anticorruption interest pressed by the City in justification of the new
contribution limits, however, is borne out in the record.          And in these

circumstances, the Supreme Court’s precedents regarding contribution limits

require the conclusion that New York City’s “doing business” restrictions are

closely drawn, despite the lack of a perfect fit between these restrictions and the

threat of real or perceived corruption. Indeed, while the Supreme Court has

never had occasion to address a campaign finance scheme involving targeted,

variable limits as are at issue here, it has consistently counseled that, outside

narrow circumstances, see Randall v. Sorrell, 548 U.S. 230, 248-62 (2006),

deference is owed to legislative determinations regarding campaign contribution

restrictions. See, e.g., McConnell, 540 U.S. at 137. Judged by this precedent,

New York City’s “doing business” contribution limits fall within—although

perhaps barely within—the bounds of the Supreme Court’s contribution limits

jurisprudence.

      First, those “doing business” within the meaning of the law are held to the

stricter contribution limits only while doing business and for a short period

thereafter—strongly suggesting that the law is aimed at the particular danger

of real or apparent quid pro quo arrangements, rather than mere influence. See

McConnell, 540 U.S. at 167 (noting that certain “regulations . . . are reasonably

tailored, with various temporal . . . limitations designed to focus the regulations

on the important anticorruption interests to be served”). The Supreme Court

has said, moreover, that contribution limits, as opposed to bans, “involve[] little
direct restraint on [a contributor’s] political communication, for [they] permit[]

the symbolic expression of support evidenced by a contribution” and do not

otherwise “infringe the contributor’s freedom to discuss candidates and issues.”

Buckley, 424 U.S. at 21.10 While it seems to me an open question whether the

City could not achieve its anticorruption goals with less severe restrictions on

“doing business” contributors, moreover, the Supreme Court has instructed that

courts have no “scalpel to probe” whether a legislative body has selected the

precisely optimal balance of free speech and security against corruption. Id. at

30. Cf. FEC v. Nat’l Right to Work Comm., 459 U.S. 197, 210 (1982) (“Nor will

we second-guess a legislative determination as to the need for prophylactic

measures where corruption is the evil feared.”).                    As to the non-matching

restriction placed upon contributions made by the family members or work

associates of individuals engaged in lobbying, the majority properly cites to

record evidence of circumvention. See Maj. Op. at 41 n.20. And finally, while I

continue to be troubled that the limits apply even as to campaigns for offices in

which the officeholder may have no direct authority with regard to the particular

business relationship at issue, this feature of the “doing business” restrictions

is not unique to the CFA. See 2 U.S.C. § 441c. In any event, appellants have

waived this argument by including it only in their reply brief. See Norton v.


10
  As the majority opinion notes, appellants make no argument that the “doing business” restrictions
prevent candidates from amassing sufficient funds to run effective campaigns, as the unconstitutional
Vermont law in Randall, 548 U.S. 230, did. See id. at 248-62; see also Green Party, 616 F.3d at 201.
Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998).

                                        %%%

      Despite some disagreement with the majority in terms of the analysis

here, I share much common ground with the majority opinion. I agree that the

ban on contributions by LLCs, LLPs, and partnerships must be upheld pursuant

to FEC v. Beaumont, 539 U.S. 146, which the Supreme Court declined to

overrule in Citizens United.      More fundamentally, I agree that individual

citizens, not their government, should determine who may speak and to whose

speech others will listen. See Maj. Op. at 14-15. The Supreme Court has

recognized that “[l]eveling electoral opportunities [by restricting political speech]

means making and implementing judgments about which [candidates’] strengths

should be permitted to contribute to the outcome of an election.” Davis, 554 U.S.

at 742.     The First Amendment, however, “[p]remised on mistrust of

governmental power . . . stands against attempts to disfavor certain subjects or

viewpoints,” as well as to draw distinctions among speakers. Citizens United,

130 S. Ct. at 898. This is why “the concept that government may restrict the

speech of some elements of our society in order to enhance the relative voice of

others is wholly foreign to the First Amendment.” Buckley, 424 U.S. at 48-49.

While I disagree with the majority’s analysis in the respects noted here, neither

the majority opinion nor this concurrence casts doubt on the paramount

importance of upholding the freedom of individuals to speak as they wish about
the political life of the nation or of their communities. It is in the knowledge of

this fundamental agreement that I respectfully concur as to Parts I, II and III.A,

and concur in the judgment as to Part III.B-E.
