On March 2, the U.S. Court of Appeals, D.C. Circuit, ruled that the Federal Election Commission’s 2006 decision, limiting the amount of money individuals may donate to a new political party that is not yet an FEC-recognized “national committee”, was erroneous. The FEC had ruled that individuals may only contribute $5,000 to new political parties that intend to run a candidate for President. Here is the 14-page opinion.

The FEC ruling was catastrophic for any new political parties that may come into existence in the future. Ross Perot founded the Reform Party in the autumn of 1995, and he spend lavishly for petition drives to get the Reform Party on the ballot. If the 2006 FEC ruling had not been reversed, that kind of activity would not have been legal in the future.

The McCain-Feingold law of 2002 limits an individual contribution to an already-established nationally-organized political party to approximately $29,000. That amount is indexed for inflation. The McCain-Feingold limit only applies to parties that are recognized as “national committees”. The FEC won’t recognize a party as a “national committee” until after it has run a presidential nominee and at least a dozen or so congressional candidates. The McCain-Feingold law doesn’t limit individual contributions to a new political party that isn’t yet a “national committee.” The FEC had classed Unity ’08 as a “political committee”, but the opinion says a “political committee” is a group that is supporting a particular candidate for federal office. Unity ’08 never had any nominees. Similarly, the Reform Party, when it was launched in 1995, didn’t have any nominees, and the FEC had never considered the Reform Party to be a “political committee”, fortunately for the Reform Party.