WASHINGTON–An obviously divided Supreme Court probed the constitutionality of Arizona’s public campaign finance system on Monday, considering a case that will have ripple effects in Connecticut and other states that have enacted similar laws.

The nine justices appeared to be narrowly split over the question of whether supplemental public financing grants for participating candidates–triggered when an opponent crosses a certain spending threshold-suppress or encourage free speech.

The justices also sparred over whether such a system was designed to “level the playing field” among various candidates–or whether it was set up to guard against political corruption, a more justifiable public-interest goal.

Although Monday’s arguments at the high court focused on Arizona’s law, Connecticut had essentially the same system in place during part of last year’s hotly contested gubernatorial election. Both Democrat Dannel P. Malloy and Republican Michael C. Fedele got $2.5 million in funding grants through Connecticut’s Citizens’ Election Program, allowing them to keep pace with their respective self-funding opponents, Ned Lamont and Tom Foley, during last summer’s primary.

A federal appeals court in New York ruled that Connecticut’s triggered matching grants system was unconstitutional, while a California court said Arizona’s law was fine. Three Connecticut parties filed briefs in the case, albeit on opposing sides.

The state’s attorney general, George Jepsen, and Ned Lamont, who spent $9 million of his own money in last year’s Democratic gubernatorial primary race, both argued that a matching grant system helped to foster a robust democratic system. Jepsen said a ruling in favor of Arizona’s system would “restore the flexibility of Connecticut and other states in designing and implementing public campaign finance systems.”

The Yankee Institute for Public Policy, a conservative think tank based in Hartford, argued that Connecticut’s matching grant program had a “chilling” effect on free speech and distorted the 2010 Connecticut governor’s race. Fergus Cullen, the Institute’s executive director, waited for hours in Monday’s 30-degree morning chill to get a seat in the Supreme Court chamber for the arguments.

If the line of questioning at today’s Supreme Court hearing is any indication, the justices appear to be headed for a 5-to-4 decision that strikes down Arizona’s matching grant system–and that therefore forecloses Connecticut’s ability to revive its own version of that law.

Opponents of the Arizona law argued today that triggered matching grants are an unjustified government interference in elections and serve to “manipulate” speech and campaign spending to the benefit of candidates who participate in public financing.

William Maurer, a lawyer for several parties challenging Arizona’s law, said the matching grant system “turns my act of speaking” into a government subsidy for his political opponent. “Each time [a nonparticipating candidate] spends… the more their opponent benefits.”

Justice Elena Kagan, the newest member of the court and an appointee of President Barack Obama, was clearly skeptical.

“There’s no restriction at all here. It’s more speech all around,” Kagan said. “The trigger does not trigger a penalty. It triggers a subsidy.”

Yes, said Maurer, but that subsidy goes to another candidate, and therefore serves as an incentive to restrain one’s own campaign outlays. “We’re dealing with a very different kind of First Amendment harm,” he said.

Justice Ruth Bader Ginsburg suggested the system allows states to economize, by giving out the grants in incremental steps based on how much an election is actually costing, rather than in one big lump sum based on an estimate. She pressed Maurer on whether a lump-sum system that took into account the possibility of a big-spending opponent would be constitutional in his view.

He said yes. But as to her question of a state’s economizing, he said: “The government cannot sacrifice speech for efficiency.”

Justice Sonia Sotomayor, another Obama nominee, seemed dubious there was any harm suffered by candidates who didn’t participate in the public financing system. “I just want to understand exactly what you’re claiming the burden is,” she said to Maurer, saying she saw no evidence of First Amendment impingement.

“There was considerable evidence of people not making expenditures and slowing fundraising to a crawl,” Maurer said.

“So the burden is you have to delay fundraising because you are choosing to do so?” Sotomayor asked.

They were “being coerced,” Maurer answered.

“You find it to your advantage,” she retorted.

Justice Anthony Kennedy, often a swing vote on the court, asked if the law was “content neutral,” or if it favored one kind of speech over another. Maurer argued it was not content neutral, helping only candidates who participate in public financing.

He later asked Maurer if “it would be a fair characterization that this law produces less speech?”

“That’s a goal and an effect,” the attorney said.

Bradley Phillips, who argued for the law’s supporters, got only a few minutes into his opening remarks before he was hit by a barrage of questions from the court’s leading conservatives, including Justices Samuel Alito and Antonin Scalia, as well as the more centrist Kennedy.

If he was in charge of an independent advocacy group, Kennedy asked, “why don’t I think twice” about making a campaign expenditure that could trigger a grant to a political opponent? He said he was “tentatively” of the view that the matching fund system would deter such spending.

Phillips said there was no “significant evidence” that independent groups held back because of the law. He later said that he might “think twice” about spending that money, but “thinking twice doesn’t create a severe burden” on free speech.

Phillips said in the end, non-participating candidates and advocacy groups would likely be convinced that their political message would be more persuasive than their opponents’ and therefore opt to broadcast it, regardless of whether it triggered a matching grant.  While there might be a few candidates who decided against that spending, he said, that’s a voluntary choice.

Similarly, William Jay, a lawyer for the Justice Department, which weighed in in favor of the law, argued that the only consequence of an independent advocacy group’s expenditure “is that another candidate will get to respond,” fostering more free speech, not less.

Both Scalia and Alito asked how the matching funding provision served to combat corruption.

Phillips said it was designed to encourage maximum candidate participation, while “preserving state resources.” He said by getting more candidates into such a system, there were more competitive races. And “when you more electoral competition, you have less corruption.”

But Chief Justice John Roberts said he looked at the Arizona election commission’s website just before Monday’s arguments began. The commission’s website says the goal of Arizona’s clean elections is “to level the playing field,” Roberts noted.

Roberts asked for an explanation of that description from Jay, the Justice Department lawyer. He scrambled a bit, saying he didn’t speak for the elections commission, but that the Arizona system was an important way of encouraging participation public financing “without wasting state resources.”

But Jay later said it allowed publicly funded candidates to “run on the same footing” as self-funded or privately funded–a remark Alito seized on as evidence that the matching grant system was more about equalizing resources than minimizing political corruption or the influence of special interests.

Jay argued that public financing did not level the playing field, noting that even with matching grants, participating candidates were still subject to spending limits, while other candidates were not.

Cullen, of the Yankee Institute, said he left the courtroom feeling like his side came out on top.

“Kennedy is considered the swing vote on a lot of campaign finance cases, and I would say he seemed skeptical of the arguments put forth by the other side,” he said. “I’m cautiously optimistic the court will rule in our favor, but I’ve learned over the years to never try and anticipate what a judge is going to do.”

The court could issue a decision anytime before the end of its current term this summer.

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