GWEN IFILL: Now, the U.S. Supreme Court weighs in on public funding for state political campaigns.
And to Ray Suarez.
RAY SUAREZ: Justices waded back in to the hot-button topic of campaign finance today, for the first time since last year's controversial ruling to allow corporations and unions to spend freely on national campaigns.
At issue today is the constitutionality of an Arizona law and its formula for providing public financing to political candidates.
Marcia Coyle of "The National Law Journal" walks us through today's argument.
And, Marcia, it's actually two joined cases.
MARCIA COYLE, "The National Law Journal": That's right.
RAY SUAREZ: How did Arizona Free Enterprise Club vs. Bennett and McComish vs. Bennett make it to the high court?
MARCIA COYLE: Well, as you said, it involves Arizona's public financing law. And under that law, if a candidate qualifies and wants to participate, the candidate receives a lump-sum grant at the beginning of the primary or general election.
If during the campaign, that grant is exceed by a non-participating opponent's contributions and independent spending by organizations or groups supporting that non-participating opponent, then it triggers matching funds. The matching funds, though, are capped by the law. The publicly financed candidate can never receive more than three times the initial grant.
A lower court upheld the constitutionality of the law, and it was the Arizona Freedom PAC that brought the challenge, as well as several candidates in Arizona in the second case, that brought the challenge to the Supreme Court today.
RAY SUAREZ: So, is it not public financing, per se, as much as the connection between having your money go up if privately financed candidates raise more money, that's attracted all this opposition?
MARCIA COYLE: That's exactly it, Ray.
The challengers here are not questioning the constitutionality of public financing. They're questioning the matching funds trigger.
RAY SUAREZ: So, how did the lawyers arguing against the bill back up their contention that it's unconstitutional?
MARCIA COYLE: William Maurer of the Institute for Justice was representing the challengers.
And he said that the law violates -- the matching funds trigger violates the First Amendment, because it chills speech. His clients either refrain from or delay spending money, out of fear that they will trigger matching funds for the participating candidate that opposes them.
RAY SUAREZ: Did they have to provide any evidence that it was so, that candidates would actually raise less money for fear of their opponents getting more public funding?
MARCIA COYLE: He claimed that in the lower court records, there was evidence of some who did refrain or wait until the last minute of a campaign to spend. Now, that was disputed by the opposing lawyer, who was defending the law here. That was Bradley Phillips.
He said that this law does not chill speech. In fact, it increases speech. By providing the matching funds ensures that a publicly financed candidate has sufficient money to be competitive, and that's more speech, not less speech.
RAY SUAREZ: As the justices quizzed the lawyers, what part of the argument seemed to catch their interest?
MARCIA COYLE: They really focused on how much of a burden, if there is a burden at all, is the matching funds provision on the non-participating candidate or independent spending groups?
Justices Kagan, Sotomayor and Ginsburg seemed very skeptical that there was a burden here. And they asked the lawyer challenging the law, what exactly is the burden, said Justice Sotomayor? Is it that you delay spending because you choose to delay? And he said, no, the burden is substantial. And the burden is that his clients are coerced into not speaking.
On the other side, though, Justice -- Chief Justice Roberts, Justices Kennedy and Alito, they pressed the lawyer defending the law, Mr. Phillips, on why that isn't a substantial burden. The chief justice said, for example, isn't it just a matter of common sense that, if I want to spend $10,000, and I know that that $10,000 is going to trigger $10,000 for my opponent or maybe $20,000 or $30,000, depending on how many publicly financed candidates there are in my campaign, then I'm going to think twice before I spend it?
But Mr. Phillips said, I might think twice, but it's not a significant burden. He noted that two-thirds of Arizona candidates do participate in the public financing, and he said that, at the outset, these candidates make a choice as to whether public financing will benefit them.
RAY SUAREZ: Janet Napolitano, who was governor of Arizona, once joked that George W. Bush raised money for her by holding a very successful Republican fund-raiser, which in fact enriched her own campaign coffers because she was using the public financing.
MARCIA COYLE: That's true.
And the opponents of the law feel that it can be gamed in certain ways. But the defenders would say that the benefits far outweigh it. And the voters of Arizona in 1998 passed a referendum that was in reaction to one of the worst election-related scandals in the state's history. And they see this law as essential to preventing corruption in campaigns.
RAY SUAREZ: So, this came out of an Arizona corruption case. Were the justices put in a position of deciding what's worse, political corruption or throttling free speech in the form of campaign spending?
MARCIA COYLE: I don't think it's a question of what's worse. I think that, if they ultimately believe -- and some questioned whether this law was designed to prevent corruption or, as the chief justice and Justice Kennedy indicated, is aren't we really here talking about leveling the playing field, which they have held is an impermissible goal under the First Amendment.
But I think what they're focused on and what they focus on in all of their campaign finance cases is, is there an impermissible burden on speech here? Are you discriminating at all on the basis of the identity of the speaker or on the content of the speech?
RAY SUAREZ: We have got about a minute left.
If the justices side with the petitioners here and strike down the Arizona law, what effect could that have on campaign finance laws in other states?
MARCIA COYLE: Well, it will have an immediate effect in probably -- well, not only in Arizona, but on about nine other states and more than a dozen cities, municipalities that have similar funding schemes.
What the court says here will be very important as to how local governments can continue to experiment with campaign finance systems that are designed to prevent the influence, the corrupting effect of big money in elections.
And the court may also say something about public financing of elections in general. But we will just have to wait to see.
RAY SUAREZ: Marcia Coyle of "The National Journal," thanks for talking to us.
MARCIA COYLE: My pleasure, Ray.