By Lawrence Hurley
WASHINGTON, Oct 8 (Reuters) - Taking on campaign finance lawfor the first time since its landmark 2010 Citizens Unitedruling, the U.S. Supreme Court appeared closely divided onTuesday over a case that could expand how much individuals cangive candidates and parties.
Based on questions posed by the justices during oralargument, in particular Chief Justice John Roberts, the courtappeared poised to take a narrower approach than it did in that2010 decision, Citizens United v. Federal Election Commission,that cleared the way for increased independent corporate andunion spending during federal elections.
The most likely outcome, if the court's five conservativesvote together, would be a ruling that would lift the limit on contributions donors can make to individual candidates over atwo-year federal election cycle without drastically overhaulingexisting court precedent that underpins other campaign financelaws.
The nine justices appeared conflicted as they weighed achallenge by both Republican donor Shaun McCutcheon, an Alabamabusinessman, and the Republican National Committee (RNC). Thechallengers say the limits, imposed under federal law, violatethe freedom of speech protections under the First Amendment ofthe U.S. Constitution.
Unlike Citizens United, the McCutcheon case deals withdonations to candidates by individuals rather than outsideexpenditures by corporations and unions. Senator MitchMcConnell, the Republican minority leader in the U.S. Senate,has, along with the RNC, joined McCutcheon's side in the caseand was in the courtroom on Tuesday. Outside, supporters ofcampaign finance reform gathered to denounce the influence ofmoney in politics, with some holding a sign saying "money out,voters in."
It was the first time the court had waded into thepolitically charged debate since the Citizens United ruling, inwhich the court was split 5-4 along ideological lines.
That ruling greatly increased outside expenditures duringthe 2012 presidential election, experts said. It also promptedbacklash led by President Barack Obama, who criticized theruling in his 2010 State of the Union speech.
During a news conference later on Tuesday, Obama said,"There's nobody who operates in politics that has perfectlyclean hands on this issue." But, he added, it was important thatthere be some binding rules.
"The people who vote for us should be more important thansomebody who's spending $1 million, $10 million, or $100 millionto help us get elected, because we don't know what their agendasare," he said.
Dan Backer, one of McCutcheon's lawyers, disputed thatinterpretation.
"Dollars don't vote, people do," he said in a phoneinterview. "At the end of the day, it's always going to be thevoters who ultimately decide."
LOOKING FOR MIDDLE GROUND
Roberts, who was in the majority in the 2010 case, appearedto be looking for some middle ground that would allow individualdonors to give to more candidates without opening the floodgatesto multimillion dollar contributions.
McCutcheon can only give the maximum amount allowable to atotal of nine candidates before he hits the cap under thecurrent law.
"We are telling him he can't make that contribution howevermodest," Roberts said.
During the argument, questions posed by several conservativejustices indicated they might vote to lift the restrictions inquestion. There was no sign, however, of a desire to go furtherin weakening a key 1976 ruling, called Buckley v. Valeo, whichupheld limits on campaign finance donations while alsodescribing how courts should analyze such regulations.
The four justices appointed by Democratic presidentsappeared reluctant to lift the restrictions. Justice AnthonyKennedy, appointed by a Republican but the court's regular swingvote, was suspicious of the government's current limits but didnot signal a strong interest in taking any dramatic steps.
In the current two-year election cycle (2013-14), anindividual can give $2,600 to a candidate or committee and$32,400 to a political party. But donors cannot exceed the$123,200 overall limit during that period.
There is also a $48,600 cap on total donations to candidatesand a $74,600 cap on donations to political action committeesand parties.
'FUNDING WHOLE SHOOTING MATCH'
The Obama administration, which is defending the federalcampaign finance laws that the Federal Election Commissionimplements and enforces, argues that the court already upheldsimilar limits in the landmark 1976 decision.
Solicitor General Donald Verrilli, arguing for theadministration, told the justices that if they were to rule infavor of McCutcheon, a small number of people could effectivelyfinance an entire federal election. Fewer than 500 people "canfund the whole shooting match," he said.
Verrilli also said that a single donor would be able to givea total of more than $3.6 million to a combination of candidatesand parties if McCutcheon won.
Such rhetoric was warmly received by the liberal members ofthe bench, including Justice Stephen Breyer and Justice ElenaKagan, but not by Justice Samuel Alito, one of the Republicanappointees who was in the Citizens United majority.
Alito criticized supporters of campaign finance reform forputting forward "wild hypotheticals that are not obviouslyplausible."
Justice Antonin Scalia was the most vocal conservative incriticizing the current restrictions, noting that one of thebiggest ramifications is that more money now flows intoindependent political action committees (PACs).
"I'm not sure that's a benefit to our political system," hesaid.
Kagan, who argued and lost the Citizens United case in herformer role as solicitor general under Obama, countered bynoting that it was the 2010 ruling that led to a rise inindependent expenditures via PACs.
"I suppose that if this court is having second thoughtsabout its rulings that independent expenditures are notcorrupting, we could change that part of the law," she said,prompting laughter in the courtroom.
The case is McCutcheon v. FEC, U.S. Supreme Court, 12-536.
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