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The Supreme Court Looks At Eliminating A 50-Year-Old Rule

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The Supreme Court Looks At Eliminating A 50-Year-Old Rule

The Supreme Court has steadily loosened campaign finance rules in a series of decisions ever since Chief Justice John Roberts was confirmed in 2005. They will look to go further on Tuesday, when the court hears arguments in a case challenging the 50-year-old limits placed on coordinated spending between parties and candidates.

In NRSC v. Federal Election Commission, a Republican campaign committee is challenging limits placed on how much money political parties can spend in direct coordination with candidates. Those limits, which were put in place in the Federal Election Campaign Act of 1971, were intended as a companion to other rules on how much individuals can contribute to individual campaigns, preventing deep-pocketed contributors from using donations to parties as a work-around to those limits. The current limits on how much a party can spend in coordination with a specific candidate vary, from $63,600 for most House races up to $3.9 million for Senate races in California and even more for presidential candidates.

The case stems from Vice President JD Vance’s 2022 Senate campaign in Ohio. During the primary, Vance’s fundraising lagged behind his GOP opponents and he relied on outside spending from billionaire Peter Thiel to push him over the top. He continued to struggle to raise money in the general election against Democratic Rep. Tim Ryan. (Vance eventually won.) And so, the National Republican Senatorial Committee, the chief political committee for GOP Senate candidates, and Vance brought suit to allow the party to spend unlimited sums in direct coordination with their candidate, arguing the coordination limits infringed on core First Amendment rights for political speech.

Lawyers for the NRSC argue that the limits in question block constitutionally protected political speech and do not prevent corruption or its appearance. Since “no one seriously claims that parties are trying to bribe their candidates,” the limits have been defended and upheld in the past as preventing “quid pro quo-by-circumvention,” the NRSC brief states. But this justification was ruled out-of-bounds in the court’s 2014 decision in McCutcheon v. FEC and so the party coordination limits should be struck down, the brief argues.

Indeed, preventing the circumvention of contribution limits is at the heart of the coordinated spending limits. If a political party can raise nearly $1 million from a single donor who wants to spend that on a particular candidate, the party can effectively contribute that $1 million — or more — to the candidate’s campaign by funding, for example, their advertisements as a coordinated expenditure. Since candidates are limited to raising $3,500 per election from a single donor, this would be a major way to circumvent those limits, which are at the heart of campaign finance regulation.

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Vice President JD Vance brought suit alongside the National Republican Senatorial Committee to invalidate party coordination limits in a case stemming from his 2022 Senate campaign in Ohio.

Michael Conroy via Associated Press

Each lower court that heard the case rejected the NRSC’s arguments, following the Supreme Court’s 2001 precedent in FEC v. Colorado Republican Federal Campaign Committee that upheld the limits. There, in a 5-4 decision written by then-Justice David Souter, the court ruled that “a party’s coordinated expenditures, unlike expenditures truly independent, may be restricted to minimize circumvention of contribution limits.” But the Supreme Court took up the case and now could upend campaign finance law yet again.

The court has upheld candidate contribution limits as constitutional since 1976, so it would be logical for them to prevent their circumvention — particularly as it has become easier for parties to raise the kind of large contributions that the candidate limits are meant to protect against. But that hasn’t held the court back in the past.

Since the court last heard a case challenging coordinated party spending limits, its composition has changed dramatically — and so has its campaign finance jurisprudence. In the years since 2001, the court’s conservative bloc has grown from five to six with no real moderates among them. And with the retirement of Sandra Day O’Connor in 2006, the court lost its last member with any experience running for office or working on a political campaign.

It has also issued decision after decision gutting federal and state campaign finance laws. The most prominent of these is 2010’s Citizens United v. FEC, a decision that enabled corporations, unions and nonprofits to spend unlimited sums on independent campaign expenditures. But there are more, including the McCutcheon decision that invalidated aggregate contribution limits that put a cap on how much money a single donor could contribute in total in one election cycle.

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These campaign finance decisions have largely been based on a repeated misunderstanding of how candidates and parties use money in elections. In each case, the court’s decisions loosening campaign finance restrictions have led to massive unintended — at least according to the court’s writings — consequences, such as an increase in undisclosed campaign money and illegal foreign donations and the circumvention of party contribution limits.

There’s no reason to think that won’t happen here.

“This case needs to be looked at in the context of the court’s now-two-decade run of substituting its own judgment for that of voters and Congress on campaign finance,” said Daniel Weiner, a campaign finance law expert for the Brennan Center for Justice, a left-leaning nonprofit.

In Citizens United, then-Justice Anthony Kennedy, who wrote the majority opinion, explained his decision by stating that “independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” That has proved wildly inaccurate as the corruption convictions of North Carolina insurance executive Greg Lindberg and former Ohio House Speaker Larry Householder (R) and the 2015 indictment of then-Sen. Robert Menendez (D-N.J.) all involved corrupting contributions made through outside groups making independent expenditures. (Menendez was later convicted of accepting bribes and acting as a foreign agent in a separate case in 2024.)

The Supreme Court under the leadership of Chief Justice John Roberts has repeatedly loosened campaign finance restrictions — with many unintended consequences.
The Supreme Court under the leadership of Chief Justice John Roberts has repeatedly loosened campaign finance restrictions — with many unintended consequences.

Manuel Balce Ceneta via Associated Press

Kennedy also promised that, thanks to the internet and disclosure laws, corporations or others spending unlimited sums on independent expenditures could be held accountable by the public. But Citizens United enabled a radical decrease in the transparency of campaign spending as “dark money” nonprofits, which do not disclose their donors, became significant political spenders. These groups now make up a growing percentage of donors to super PACs. Though super PACs do have to disclose their donors, that does not trickle down to requiring disclosures of the donors to those donors — making the true origin of a large portion of election funding completely opaque.

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Similarly, the notion that independent expenditures are truly independent from candidates or parties has proved to be completely inaccurate. The largest-spending outside groups are those directly connected to party leaders or staffed by close aides to the candidates they support. Candidates provide information, like b-roll and directions on what messages to use in advertising for outside groups, on their websites or surreptitiously on social media. And in 2024, the FEC ruled that supposedly independent groups may directly coordinate with parties and candidates on get-out-the-vote operations. Billionaire Elon Musk went on to do exactly this with the Trump campaign and earned a plum spot in the White House for his efforts.

In the McCutcheon case, the court’s decision was largely rooted in naive expectations of how political parties would act once aggregate limits were eliminated. The aggregate contribution limits capped the total amount a donor could give in any one election, among all political parties and candidates. The intent was, like the coordinated spending limits, to prevent corruption and work-arounds of the candidate limits.

A key argument in the case was that, absent the aggregate limits, political parties could create a joint fundraising committee that linked all 50 state parties together with the national party and allowed them to easily shift money donated in one state to support a candidate elsewhere. During oral arguments, Alito called these “wild hypotheticals.”

Then-Justice Antonin Scalia wrote for the majority: “The Government provides no reason to believe that many state parties would willingly participate in a scheme to funnel money to another State’s candidates.”

But that’s exactly what happened. Beginning with Hillary Clinton’s presidential campaign in 2016, every presidential campaign has created a super joint fundraising committee that then redirects contributions made to non-swing-state parties toward state parties in swing states or back to the national party.

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While the party coordination limits seem to present less of an opportunity for the court to cause severe unintended consequences with another uninformed decision, there are a couple of things to keep in mind.

First and foremost, coordinated spending is done almost entirely in the form of advertising: The candidate designs an ad and plans when and where to run it, and the party foots the bill. But this could have unintended downstream consequences for television stations, which are required to provide candidates with the lowest unit price for campaign ads in the run-up to an election. Neither parties nor outside groups receive this benefit.

The Supreme Court will hear arguments in NRSC v. FEC on Tuesday.
The Supreme Court will hear arguments in NRSC v. FEC on Tuesday.

J. Scott Applewhite via Associated Press

If parties can suddenly subsidize candidate ads, television stations could be put under financial strain as they lose money that they previously received from higher charges on party advertising. This is an argument made by lawyers for the Democratic National Committee, who have entered the case to defend the limits.

“Broadcasters across the country will face significant increases in advertisements that purport to qualify for lowest unit rates, thereby inflicting a substantial financial strain upon them,” the DNC’s brief states.

This is likely to lead broadcasters to challenge rules that interpret coordinated spending as coming from the candidate and therefore receiving the lowest unit rate, according to Marc Elias, the lead lawyer for the DNC.

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“This will have commercial impacts outside of the campaign finance world,” Elias said.

And then there are the unintended consequences that may flow within the campaign finance world.

By eliminating the aggregate limits, the McCutcheon decision opened the door for parties to collect massive contributions from single donors through super joint fundraising committees. In 2024, the maximum contribution to Vice President Kamala Harris’ joint fundraising committee was $929,600 for a single donor. Most of that money wound up with the Democratic National Committee or its state parties, which then circumvented contribution limits by routing that money to swing state committees.

If the court does end the coordinated spending limits, it will lead to a mass circumvention of the candidate limits — just as the McCutcheon decision did for party limits. And, as the unintended consequences of McCutcheon now flow into the NRSC case, so too would the circumvention of candidate limits lead toward their ultimate elimination.

There may be reasonable policy reasons to support ending or raising the coordinated spending limits, as the Brennan Center’s Weiner has advocated. In a world where single billionaires like Musk can spend unlimited amounts to directly coordinate with candidates through super PACs, it would be better for political parties, which are rooted in mass democracy and governance, to be on an equal, if not supreme, footing.

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But that should be done by Congress, Weiner argues, not the Supreme Court — which time and time again has shown it does not understand how political campaigns work.

“The ultimate question is who should decide,” Weiner said. “I think it should be Congress that decides. We think of that as a fundamental principle. This is not something within the constitutional competence or, frankly, the expertise of the Supreme Court to make this call.”

Finance

Aussie who turned teen side hustle into $100 million empire pushes back at retail trend

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Aussie who turned teen side hustle into 0 million empire pushes back at retail trend

When Anthony Nappa started selling hair products out of the corner of his parents’ warehouse as a teen, he never could have imagined what the side hustle would become. The business has grown from a small eBay store to a multi-million dollar beauty empire that is rapidly expanding its physical presence across Australia.

Founded as a side project in 2012 when Nappa was 19 years old, Oz Hair & Beauty posted $100 million in revenue in the past financial year and now employs more than 500 staff across the country. It has opened 30 new stores in the past three years, with the aim of expanding to 50 stores by the end of the next financial year.

Nappa, now 33, told Yahoo Finance it was a far cry from his original plan when he was a teenager. Back then, he was working part-time as a labourer while studying Commerce at university.

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“My plan was to live at home, study at uni, while I’m studying, save as much money as possible and by the time I graduate, put a down payment on a house and have a graduate job,” he said.

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But when his labouring boss suddenly left the country, Nappa found himself out of a job. His parents, Elio and Venessa Nappa, owned a number of Oz Hair hairdressing salons in Sydney, so he decided to start selling the salon’s hair products on eBay.

Nappa invested $10,000 of his savings into the business and saw sales start picking up when he migrated from an eBay store to a proper website and later Shopify.

“Long story short, it really took off. I was working at the back of the warehouse, and then I had to lease the whole warehouse,” he said.

Do you have a story to share? Contact tamika.seeto@yahooinc.com

Anthony's younger brother Guy joined the business in 2017, and now serves as chief operating officer.
Anthony’s younger brother Guy joined the business in 2017, and now serves as chief operating officer.

Growing bricks and mortar presence

It was during the pandemic that business really “boomed”, Nappa said. In 2019, annual revenue sat at about $24 million, but by 2021, turnover had reached $40 million.

In 2021, Oz Hair & Beauty received backing from billionaire Brett Blundy’s BBRC and Daniel Agostinelli, CEO of Accent Group, which runs shoe retail chains like Platypus and Hype.

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Nappa said part of the deal included buying his parents’ store in the QVB, which was then rejigged in 2022 into a fully fledged retail store.

“That increased sales by nearly double. So we thought we’ve got something here now,” Nappa said.

At a time when many discretionary retailers are reducing their physical footprints, Oz Hair & Beauty has taken the opposite approach.

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Scaling Blended Climate Finance: What Works in Practice – CPI

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Scaling Blended Climate Finance: What Works in Practice – CPI

The Catalytic Climate Finance Facility (CC Facility), a program jointly managed by Climate Policy Initiative and Convergence, along with the Government of Canada, is hosting an event during London Climate Action Week focused on Scaling Climate Investments in Emerging Markets Using Blended Finance.

The event will explore opportunities and challenges in mobilizing private capital for climate action in emerging markets, including the role of catalytic capital instruments such as grants and technical assistance in scaling innovative blended climate finance solutions. Discussions will draw on practical insights from actual blended climate finance transactions and also highlight key lessons emerging from programs such as the CC Facility, which leverages these instruments to accelerate and scale such solutions. The event will bring together investors, government funders, DFIs and MDBs, philanthropies, climate finance practitioners, and ecosystem partners, and will provide an opportunity to network with key stakeholders across the blended and climate finance ecosystem over drinks.

Due to limited capacity, this is an invite-only event. If you are interested in attending, please register your interest  here.

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Finance

Special meeting set for swearing-in of Magnolia finance officer and town clerk

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Special meeting set for swearing-in of Magnolia finance officer and town clerk

MAGNOLIA, Duplin County — The Town of Magnolia will hold a special meeting next week to swear in two town officials.

The meeting is scheduled for Tuesday, May 26, at 5:45 p.m. at Magnolia Town Hall on East Carroll Street.

Town officials said the meeting will focus on the swearing-in of the town’s finance officer and town clerk.

According to the town’s website, the town clerk supports the mayor, town manager and Board of Commissioners by preparing meeting materials, keeping public records and helping with official town documents.

The finance officer is responsible for the town’s financial operations, including budget oversight, financial records, payroll, audits and regular reports to commissioners.

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Magnolia Town Hall is located at 110 East Carroll Street.

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