Claiming that stricter limits on contributions and expenditures are unconstitutional and lead to a less egalitarian and more corrupt system of campaign financing, they cite the example of three elderly citizens who in 1972, took out an ad in the New York Times condemning the secret bombing of Cambodia and calling for the impeachment of President Nixon. The ad included an honor role of Members of Congress who had opposed the bombings, including Sen. George McGovern, who was also running for president.

The ACLU argued that the ad was a classic example of speech protected by the First Amendment, but the U.S. government saw it differently and sued the three for violation of existing federal campaign finance laws. Claiming that the ad was an attempt to influence the election, they threatened the Times with criminal prosecution if they published such an ad again.

Rising to the challenge, the ACLU sought to purchase ad space in the Times to criticize President Nixon for his position on school desegregation. Fearful of government reprisal, the Times refused to publish it. The ACLU sued and the Times filed an amicus brief in support of the ACLU.

The ACLU won both cases on First Amendment grounds. In both cases, the government argued that barring such ads was necessary to achieve fair elections even though the rights of citizens to criticize their government would be curbed.

In 1974, after Watergate, Congress enacted the Federal Elections Campaign Act (FECA). At its core was the imposition of limits on campaign contributions and expenditures, not only of candidates and political parties, but of individual citizens as well, even if their advocacy was independent and unconnected to particular candidates or political parties. 

FECA limited candidate expenditures in a way that made little sense. For example, a candidate could speak no more after the expenditure limit was reached, even if there was no plausible possibility of corrupt influence, for example if thousands of supporters contributed $5 each to allow him or her to do so.
FECA also failed to meet the goal of enhancing fair elections by giving all candidates equal access to the voters. For example newspapers' and broadcasters' editorials and reportage in support or opposition to a candidate were unlimited by the new law. But a candidate's ability to buy ads to respond was significantly curbed.
The ACLU thought this was a clear violation of the First Amendment, and had no relationship to the legitimate purpose of reducing corruption and challenged FECA in Buckley v. Valeo . In 1976 the U.S. Supreme Court struck down limits on independent expenditures, ruling that any individual or group unconnected to a candidate could advocate the election or defeat of that candidate without limit. The Court also struck down limits on expenditures by candidates, ruling that any limit on spending money to publish ads or brochures would necessarily bar speech. 

But the Court upheld the law's limits on the size of direct contributions to candidates. The Court agreed that a contribution was a form of political expression, but held that the government's interest in reducing corruption was a justifiable reason for limiting the direct contribution's size. 

This split decision by the Court created several anomalies. Because it ruled that a candidate could not corrupt himself, it permitted a wealthy candidate like Ross Perot to spend an unlimited amount on his own candidacy. But if an equally wealthy individual wanted to support Perot's opponent, the law made it a crime to do so. 

Because no limits applied to newspapers, radio or television, an owner could openly campaign for one candidate in his medium, but a wealthy citizen could not provide equivalent support to the other candidate to allow him to respond. Thus the inequality of campaign financing was worsened.

The ACLU supports public financing of elections that would establish a floor of support for candidates to communicate with voters.

Labeling today's calls for reform "bogus" and "discredited" because they are based on the idea of limits to contributions and expenditures, the ACLU says that such reforms "will lead to deeper inequalities and to violations of citizens' rights to free speech, as they have done in the past." 

Recognizing communicating with voters as the most expensive part of election campaigns, the ACLU says it supports "sufficient " public financing that is "fair to all candidates." Claiming that studies show that sufficient financial floors matter more than ceilings in running an effective campaign, they advocate that providing a floor of support through public financing for all credible candidates is a better and likely more constitutional route to reform than the "failed attempt to establish ceilings by imposing legal limits on contributions and expenditures."

Even if we limit our discussion of campaign finance reform to the public financing of elections, real differences presently exist between the ACLU vision and our own. Probably the most significant conflict is the ACLU's proposal to allow publicly funded candidates to raise unlimited funds from other sources (special interests included) in addition to any public money provided by taxpayers. They take this position on the basis that to limit candidate fundraising would create First Amendment problems.
The Alliance doesn't agree. Under our proposed San Diego Clean Elections Act candidates are given a voluntary choice to fund their electoral efforts either through private funding as we do presently, or to use only public funding with no other moneys allowed, including their own. We feel that this doesn't deprive candidates of any of their First Amendment rights, but in fact gives them an additional alternative source of campaign funds and acts to increase the actual quantity of free speech available. To expect taxpayers to fund a candidate with public funds and then allow that candidate to collect private money in addition, defeats the whole purpose of reducing the influence of special interest money in the electoral process.

Under our proposed San Diego Clean Elections Act, publicly funded candidates running for San Diego office would get approximately two thirds of the average amount spent in the last election campaign as their publicly funded campaign war chest. If a privately funded opponent spent more than what was spent in that last election campaign then an accelerator provision would kick in and give the publicly funded candidate up to twice as much money as the base amount in an attempt to keep the electoral playing field as level as possible.

The ACLU opposes the accelerator clause on the basis that if a third privately funded candidate was running he would be disadvantaged because the publicly funded candidate would get more funds when an opposing candidate spent more but he would not and thus be at a double disadvantage. Our answer to that concern is that all privately funded candidates have the choice to be publicly funded if they can qualify and agree to take no private money. To later say that they made a bad choice and are disadvantaged does not raise that complaint to the level of being constitutionally disadvantaged.