## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-3922

___________ Ron Russell, Kent Ingram, * William R. Austin, and Associated * Industries of Arkansas Political * Action Committee, * * Appellants, * * v. * * Troy Burris, In His Official Capacity * as Chairperson of the Arkansas Ethics * Commission; Rita Looney, In Her * Official Capacity as a Member of the * Arkansas Ethics Commission; * Appeals from the United States Tom Alexander, In His Official * District Court for the Eastern Capacity as a Member of the Arkansas * District of Arkansas. Ethics Commission; Ben Allen, In * His Official Capacity as a Member of * the Arkansas Ethics Commission; * Jack Kearney, In His Official Capacity * as a Member of the Arkansas Ethics * Commission; and Citizens for Clean * Government, * * Appellees. * *

____________________ * * American Civil Liberties Union of * Arkansas, James Madison Center for * Free Speech, Shrink Missouri *-2-

Government PAC, and Zev David * Fredman, * * Amici Curiae on Behalf of Appellants. * * * * Connecticut, Iowa, Kansas, Kentucky, * Massachusetts, Minnesota, Missouri, * Montana, New Mexico, North Dakota, * Utah, and Vermont, * * Amici Curiae on Behalf of Appellees. * *

___________ No. 97-4033

___________ Ron Russell, Kent Ingram, * William R. Austin, and Associated * Industries of Arkansas Political * Action Committee, * * Appellees, * * v. * * Troy Burris, In His Official Capacity * as Chairperson of the Arkansas Ethics * Commission; Rita Looney, In Her * Official Capacity as a Member of the * Arkansas Ethics Commission; * Tom Alexander, In His Official * Capacity as a Member of the Arkansas * Ethics Commission; Ben Allen, In * His Official Capacity as a Member of *-3-

the Arkansas Ethics Commission; and * Jack Kearney, In His Official Capacity * as a Member of the Arkansas Ethics * Commission, * * Appellants, and * * Citizens for Clean Government, * * Intervenor as Defendant. * *

____________________ * * James Madison Center for * Free Speech, Shrink Missouri * Government PAC, and Zev David * Fredman, * * Amici Curiae on Behalf of Appellees. * * * * Connecticut, Iowa, Kansas, Kentucky, * Massachusetts, Minnesota, Missouri, * Montana, New Mexico, North Dakota, * Utah, and Vermont, * * Amici Curiae on Behalf of Appellants. * *

___________ No. 97-4038

___________ Ron Russell, Kent Ingram, * William R. Austin, and Associated *-4-

Industries of Arkansas Political * Action Committee, * * Appellees, * * v. * * Troy Burris, In His Official Capacity * as Chairperson of the Arkansas Ethics * Commission; Candi Sue Russell, In Her * Official Capacity as a Member of the * Arkansas Ethics Commission; Marvin * Delph, In His Official Capacity as * a Member of the Arkansas Ethics * Commission; Rita Looney, In Her * Official Capacity as a Member of the * Arkansas Ethics Commission; and Norton * Wilson, In His Official Capacity as a * Member of the Arkansas Ethics * Commission, * * Defendants, and * * Citizens for Clean Government, * * Appellant. * *

____________________ * * James Madison Center for Free * Speech, Shrink Missouri Government * PAC, and Zev David Fredman, * * Amici Curiae on Behalf of Appellees. *-5- ___________ Submitted: April 13, 1998 Filed: June 4, 1998

___________ Before WOLLMAN, BEAM, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

___________ MORRIS SHEPPARD ARNOLD, Circuit Judge. In 1996, the people of Arkansas, by voter initiative, approved a campaign finance reform measure entitled Initiated Act I. Prior to A ct I, Arkansas law limited individuals and p olitical action committees to contributions of $1,000 per candidate during eac h election cycle. Act I reduced the contribution limit to $300 for the offices of governor, lieute nant governor, secretary of state, treasurer, auditor, attorney general, an d commissi oner

of state lands, see Ark. Code Ann. § 7-6-203(a), § 7-6-203(b), and t o $100 for all other state public offices, see Ark. Code Ann. § 7-6-203(a)(1), § 7-6- 203(b)(1).

ActI also created a special category of political action committee (PAC), se e Ark. Code Ann. § 7- 6-201(9), § 7-6-201(10), known as a small-donor PAC. See Ark. Code Ann. § 7-6-201(12). Under Act I, a small-donor PAC m ay accept no contribution larger t han $25, see Ark. Code Ann. § 7-6-201(12)(B), and it may contribute no more than $2,5 00 per election to any candidate, see Ark. Code Ann. § 7-6-203(d). Act I aut horizedas well the creation of a campaign fund-raising entity known as an indepen dent

expenditure committee. See Ark. Code Ann. § 7-6-201(14). A n independent expenditure com mittee may, like any person, make unlimited independent
ex penditures (that is, ones not coordinated with a candidate) to advocate the electio n or defeat of a clearly identified candidate for offic e. See Ark. Code Ann. § 7- 6-201(13), § 7-6-201(14). Such a committee, however, may accept no more than-6-

$500 f rom any person annually. See Ark. Code Ann. § 7-6-203(k). Finally, Act I authorized local governments to set reasonable limitations on fund-raisin g for campaigns for loc al offices. See Ark. Code Ann. § 7-6-224. Ron Russell, Kent Ingram, William Austin, and the Associated Industries of Arkansas Political Action Committe e challenged e ach of these Act I provisions in the district court, as well as a pre-Act I provision limiting contributions to any one PAC to $200 annually, see Ark. Code Ann. § 7-6-201(9)(B).
Following a bench trial, the district court held t hat the contribution limits of $300 for certain statewide offices and of $100 for state judicial offices were unconstitutional because they violated the First Amendment's prohibition against limitations on th e freedom of speech. See R ussell v. Burris , 978 F. Supp. 1211, 1222, 1224, 1229 (E.D. Ark. 1997). The trial court, h owever, upheld the $100 contribution limit as to all other offices and th e $200 contribution limit to PACs. Id. at 1223, 1225, 1229. The tria l court also held that the different ial treatment for ordinary PACs and small-donor PACs did not violate the Fourteenth Amendment's equal protection clause. Id. at 1227, 1229. The trial court declined to reach the merits on the other two issues, finding that th e plaintiffs did not have standing to contest the limit on contributions to independen t expendit ure committees, id. at 1217, 1229, and that the provision authorizing relevant actions by local governments was not ripe for a constitutional challe nge. Id. at 1217- 18, 1229.
All parties appeal the rulings u nfavorable to their litigating positions. We affirm in part and reverse in part.

I. Standing is, of course, a threshold issue in every case before a federal court: If a plaintiff lacks standing, he or she cannot invoke the court's jurisdiction. See Boyle v. Anderson , 68 F.3d 1093, 1100 (8th Cir. 1995), cert. denied , 516 U.S. 1173 (1996). In order to invoke the jurisdiction of a federal court, one must meet three requirements.-7-

First, a plaintiff must have suffered an "injury in fact," and such an injury must b e concrete, particularized, and either actual or imminent. Id. at 1100-01. Second, a would-be litigant must make out a causal connecti on between the alleged injury and the conduct challenged. Id. at 1100. Third, he or she must show that the injury is likely to be redressed by a favorable decision. Id

.
The trial court determined that each of the plaintiffs had Article III standing a s to all but one of their challenges, se e Russell , 978 F. Supp. at 1217, and the defendants do no t contest that determination here. The plaintiffs maintain, however, that the trial court err ed in finding that they did not have Article III standing to challenge th e provisions of Act I relating to independent expenditure committees

. The trial court found that the plaintiffs did not face a credible threat of present or future prosecution with respect to this part of their clai m, and thus could show no actual
or i mminent "injury in fact," because none of them "could think of an independen t expend iture committee to which they had contributed in the past or to which the y planned to contribute." Id. Indeed, one plaintiff testifi ed, "Well, in all honesty, I'd have to t ell you it would take a stretch of my imagination to figure out why I'd want t o contribute anything to an independent committee." Another simply testified that he did not know if he would ever contribute to such a committee.
We are mindful that where "plaintiffs all ege an intention to engage in a course of condu ct arguably affected with a constitutional interest which is clearly proscribed by statute, courts have found standing to challenge the statute , even absent a specific threat of enforcement." United Food & Commercial Workers International Union v. IBP, In c. , 857 F.2d 422, 428 (8th Cir. 1988). But the plaintiffs have not demonstrated any such inte ntion: They have indicated neither that they would contribute to a specifi c independent expenditure committee nor that, but for the limitations of Act I, they would form an independent expenditure committee. Standing may not be predicated merely upon a conjectural or hypothet ical injury or, as one of the plaintiffs here would have it,-8-

upona stretch of the imagination. See Lujan v. Defenders of Wildlife , 504 U.S. 555, 564 (1992). We therefore affirm the trial court's determination that the plaintiffs lacked standing to challenge the provisions relevant to independent expenditure committees.

II. "Where at all possible, government must curtail speech only to the degre e necessary to me et the particular problem at hand, and must avoid infringing on speech tha t does not pose the danger that has prompted regulation." Federal Electio n Commis sion v. Massachusetts Citizens for Life , 479 U.S. 238, 265 (1986)

. Government attempts to limit campaign contributions, therefore, are " ' "subject to the clos est scrutiny." ' " Carver v. Nixon , 72 F.3d 633, 636 (8th Cir. 1995), cert. denied , 116 S. Ct. 2579 (1996), quoting Buckleyv. Valeo , 424 U.S. 1, 25 (1976) ( per curiam ), itself quoting NAACP v. Alabama , 357 U.S. 449, 461 (1958). Under this standard, a significant

interference with protected rights of political association may be sustained onl ywhen the state demonstrates a compelling interest and means closely drawn t o avoid unnecessary abridgement of associational freedoms. Carver , 72 F.3d at 636.
Intervenor (as a defendant) Citizens for Clean Government (CCG ) argues that we shoul dapply a more lenient standard of review to the legislation in this case becaus e Act I included not only contribution limits but also a public subsidy scheme. For this propositio n, CCG relies upon the Supreme Court's ruling in Buckley that upheld a ban
on general election campaign contributions to, and a limitation on general electio n cam paignexpenditures by, a presidential candidate who elected to receive a publi c subsidy. See Buckley , 424 U.S. at 85-109.

But the BuckleyCourt was clear that it was the optional nature of t he contribution and expenditure limit scheme, not the subsidy, that rendered the scheme co nstitutionally permissible: "Just as a candidate may voluntarily limit the size of the contributions he chooses to accept, he may decide to forgo private fundraising and accept publi c funding." Id. at 57 n.65. Similarly, we recently upheld a voluntary-9-

campaign subsidy and limitation scheme in Minnesota because the scheme "present s cand idates with an additional, optional campaign funding choice, the participation i n which is v oluntary." Rosenstiel v. Rodriguez , 101 F.3d 1544, 1552 (8th Cir. 1996) , cert. denied , 117 S. Ct. 1820 (1997). It is true that Act I provided a subsidy an d limitation scheme, but unlike the schemes upheld in Buckley and Rosenstiel , Act I was imposed upon all candidates: Candidates do not have the power to opt out. W e therefore d ecline this invitation to apply a standard of scrutiny to this case that i s different from the one that we adopted in Carver

.
CCG argues fo r a more lenient standard of review on the basis of two recen t Supreme Court decisions as well, but neither of these authorities modifies the standard of review appropriate to this case. In Colorado Republican Federal Campaig n Committee v. Federal Election Commission , 518 U.S. 604, 609 (1996) (opinion o f Br eyer, J.), a case involving the application of federal campaign expenditure limits , three justices resorted to what CCG calls a weighing test, rather than strict scrutiny, to decide the ca se. See id. at 616, 618. These justices described their approach a s consis tent

with cases in which the Court "essentially weighed the First Amendmen t interest in permitting candidates (and their supporters) to spend money to advance their pol itical views against a 'compelling' governmental interest in assuring the electora l system's legitimacy, protecting i t from the appearance and reality of corruption." Id. at 609. This adjudicatory approach appears to us to be a rest atement or reformulation, not a modification, of the Court's familiar strict scrutiny analysis.

We are a ware that during the last term, in Timmons v. Twin Cities Area Ne w Party , 117 S. Ct. 1364, 1370 (1997), the Supreme Court upheld an election regulation that barred a political party from choosing as it s nominee a candidate already appearing
on another party's ballot. The Court held that while regulations "imposing sever e burdens on plaintiffs' rights must be nar rowly tailored and [must] advance a compelling st ate interest," lesser burdens "trigger [a] less exacting review." Id. We believe , however , that restrictions on individual contributions to candidates and on candidates'-10-

amassing sufficient resources to run for office are more severe than the restrictions at issue in Timmo ns . Where the regulations impose severe burdens on First Amendment rights, as here, Timmons reiterates the Court's position that strict scrutiny applies.

We must therefore first determine what interest can be sufficiently compelling to permit the state to restrict First Amendment freedoms. The compelling state interes t identified in Buckleywas "the prevention of corruption and the appeara nce of corruption spawned bythe real or imagined coercive influence of large financial contributions on candidates' positions and on their actions i f elected to office." Buckley , 424 U.S. at 25. The Court r eiterated this position five years later, holding that " Buckley identified a single narrow exception to the rule that limits on political activity were contrary to the First Amendment. The exception relates to the perception of undue influence of large contributors to a candidate." Citizens Ag ainst Rent Control v. Berkeley , 454 U.S. 290, 296 -97 (1981) (emphasis omitted). Subsequently, the Court stated flatly that "[p]reventing corruption or the appearance of corruption are the only legitimate an d compelli ng government interests thus far identified for restricting campaign finances." Federal Election Commission v. National Conservative Political Action Committee , 470 U.S. 480, 496-97 (1985).
Only three years ago, we emphasized in Carver , 72 F. 3d at 638-39, that the state may abridge political sp eech in the form of campaign contributions only to address the reality or perception of undue influence or corruption attributable to large contributions. We turn, then, to a consideration of whether the challenged provisions can pass muster under this standard.

III. We co nsider first the provisions of Act I that limited direct contributions t o candidates to $300 per election for certain statewide offices, see Ark. Code Ann. § 7- 6-203(a), § 7-6-203(b), and to $100 per election for all other state offices, see Ark

. Code Ann. § 7-6-203(a)(1), § 7-6-203(b)(1). The defend ants must prove first that there-11-

is real o r perceived undue influence or corruption attributable to large politica l contributions in Arkansas, and then that these challenged provisions of Act I ar e narr owly tailored to address that reality or perception. We find that the defendant s failed to carry their burden before the trial court.

We n ote that our review of the trial court's judgment may involve the review of some of the factual determinations that it made. The Supreme Court has instructed that, in cases involving the First Amendment, appellate courts are to make an independen t exami nationof the whole record to ensure that their judgments do not constitute a forbidden intrusion on the right of free expression. See New York Times Co. v. Sullivan , 376 U.S. 254, 2 85 (1964). But we are also mindful of Fed. R. Civ. P. 52(a), whic h provides that a trial court's factual findings are typically reviewed for clear error.

To reconcile these two legal propositions, we held last year that, in case s involving the First Amendm ent, we would review findings of noncritical facts for clear
er ror, but would conduct an independent review of critical facts. See Familie s Achieving Independence and Respect v. Nebraska Department of Social Services , 111 F.3d 1408, 1411 (8th Cir. 1997) ( en banc ). Accordingly , in the discussion that follows,
we gi ve due deference to the trial court's determination of noncritical facts, while w e review independently those facts that we believe to be critical.
We begin with the observation that no de fendant provided any credible evidence to th e trial court of actual undue influence or corruption stemming from larg e contributio ns. We are left, then, to determine whether the defendants proved that a reasonable person could perceive, on the basis of the evidence presented at trial, that such contributions make for undue influence or spawn corruption.
CCG presented proof at trial that was intended to demonstrate specific instances in which large contributions had given rise to the appearance of undue influence or-12-

corruption. Much o f this proof focused on the introduction in the Arkansas legislature of a bill that would have prohibited local governments from regulating tobacco. Th e bill 's sponsor, State Representative James Dietz, had received as much as $2,700 i n contri butions the previous year from various sources related to the tobacco industry , such as the T obacco Institute. Many other supporters of the bill had apparently als o rec eivedcontributions from pro-tobacco sources. An opponent of the bill, Stat e Representative Ted Thomas, testified that there was a "uniform" public perception of corruption associated with the bill's having been introduced and supported by legislators who had received contributions from tobacco interests.

Even as suming that Mr. Thomas was correct that there was a public perception of corruption, we must determine whether that public perception was reasonable, and whether that perception of corruption derived from the magnitude of the contributions to Mr. Dietz and oth er supporters of the bill. We believe, after an independent review of the fac ts presented to the trial court, that the defendants did not prove that th e perception of

corruption to which Mr. Thomas alluded was objectively reasonable. A newspaper article admitted intoevidence quoted Mr. Dietz as saying that he supported th e preemption measure because he believed that one "ought to have the right to say what goes on inside his building as long as i t's legal." That Mr. Dietz received political contributions from those whose interests he tended to support hardly indicates, on it s own, any corruption.
The defendants provided no evidence at trial, for instance, that Mr. Dietz changed his position on the tobacco bill due to an intervening contribution. Nor did th e defe ndants provide evidence that Mr. Dietz sought to conceal his contributions fro m tobacco-related sources. If it were reasonable to presume corruption from the fact that
a public official voted in a way that pleased his contributors, legislatures coul d constitutionally b an all contributions except those from the public official's opponents, a patent absurdity. That would spell the end tothe political right, protected by the First Amendment, to support a candidate of one's choice.-13-

The defendants' objections to Mr. Dietz's activities are also, we believe , essentially unrelated to the size of the individual contributions that he received. Th e defe ndants did not provide evidence, such as that produced by the government i n Bu ckley , of multi-million-dollar contributions to Mr. Dietz. Indeed, our review of the evidence presented to the trial court indicates that Mr. Dietz reported no individua l contr ibutionlarger than $1,000 from any source, tobacco-related or otherwise. W e believe tha t $1,000 is simply not a large enough sum of money to yield, of its ow n accordand without further evidence, a reasonable perception of undue influence o r corruption.

Th e defendants essentially criticize Mr. Dietz for offering a bill favorable t o in terests from whom he had already accepted campaign contributions. The difficulty pointedto, then, seems to be the identity of the contributors and their subsequen t interest in legislation rather than the size of their contributions. We no te that even if Mr. Dietz had received twenty-seven individual contributions of $10 0 from various tobaccorelated sources instead of a few somewhat larger contributions, the defendants coul d make the same criticism of his activities as they made here. We therefore conclude that the evidence that the defendants presented regarding the tobacco legislation does no t permit a finding of a reasonable perception of corruption or undue influence due to large contributions.

The defendants also produced proof at trial that was related to contributions by lob byists to State Representative Ode Maddox. In April, 1996, a group of lobbyist s helda fund-raiser for Mr. Maddox at the Arkansas Poultry Federation in Little Rock. According t o the trial court, at that event Mr. Maddox raised a total of more tha n $22,000 from various lobbyists, PACs, and corporations. Our independent review of the record shows that Mr. Maddox received no contribution in excess of $1,000 from any single source.-14-

Th e record does not indicate any change in Mr. Maddox's political behavio r follo wing these donations, nor does it indicate that Mr. Maddox sought to conceal his contrib utions or their sources. Indeed, the defendants did not even demonstrate that Mr. Madd ox voted in any particular fashion with respect to any relevant issue s follow ing the receipt of these donations. At bottom, the defendants' complaint abou t Mr. Maddox's contributions is that they came from lobbyists who live outside his district andhave business before his committee from time to time. But this complaint is no t related to the size of th e contributions made to Mr. Maddox, and thus does not satisfy the compelling state interest standard established in Buckleyand Carver . We conclude, then, that the evidence that the defendants offered regarding Mr. Maddox's fund-raising practices does not permit a finding of a reasonable perception of corruption or undu e influence stemming from large contributions.

The defendants also adduced proof at trial of contributions by "real estat e intere sts" to members of the Little Rock municipal government. But, again, th e defendants' declared interest in regulating these has to do with the identity of th e contributo r

and that contributor's interests rather than with the size of individua l contributions. According to records provided to the trial court, no member of the Little Rock municipal government received more than $1,000 from any so-called "real estate interest." The record does not indicate any change in any official's behavior following such c ontributions, nor did the defendants demonstrate that any official attempted t o conceal the source of the contributions. The evidence instead shows that the "real estate interes ts" contributed to candidates who supported initiatives with which th e cont ributors agreed -- that is, the "real estate interests" appear to have chosen wel l which candidates to support.

We cannot say that this evidence is sufficient to establish that there could be a reasonable perception of corruptio n or undue influence due to large contributions. The defendants identify, instead, a concern that "real estate interests" gave money to officials of a municipal government, and that those officials then voted on issues-15-

relevant to real estate. This concern, as we have said above, is not related specifically to the si ze of the contributions, and thus is outside the scope of the compelling stat e interest as defined by Buckley and Carver

.
We al so believe that the candidate contribution limits set forth in Act I are to o low to allow meaningful participation in protected speech and association. See Carver , 72 F.3d at 641-42. In Buckley , 424 U.S. at 20-35, the Supreme Court approved a $1,000 contribu tion limit as a narrowly tailored means to address the problem of large campaign contributions. As we noted in Day v . Holahan , 34 F.3d 1356, 1366 (8th Cir. 1994), ce rt. denied , 513 U.S. 1127 (1995), inflation has eroded approximately 6 0 percent of the v alue of a dollar since 1976. A $1,000 contribution in 1976 would thus be worth about the same as a $2,500 contribution today. We recognize that th e c o ntribution limit upheld in Buckley does not constitute a constitutional minimum and that we may n ot fine-tune the contribution limits established by Act I. See Carver , 72 F.3d at 64 1. We must, however, invalidate the contribution limitations if they ar e different in kind from those that Buckley upheld. See id.

The provisions of Act I challenged here limited contributions to a candidate t o only $100 or $300, depending upon the office. See Ark. Code Ann. § 7 -6-203(a), § 7- 6- 203(b). The limits prescribed by Act I, then, are (adjusted for inflation ) approximately 4 perce nt or 12 percent, respectively, of the limit upheld in Buckley . In Day , 3 4 F.3d at 1366, we concluded that a limitation of $100, or 4 percent of th e inflation-adjusted limit upheld in Buckley , constitute d a difference in kind from the limit upheld in Buckley . In C

arver , 72 F.3d at 641-42, we held that contribution limitations of $100 or $30 0 per election cycle (2 percent or 6 percent, respectively, of the limi t approvedin Buckley ) were "dramatically lower," and thus different in kind, from th e limit upheld in Buckley

. We believe that the limitations in question here are similarly dramatically lower than, and different in kind from, the limits approved in Buckley , and thus are unconstitutionally low.-16-

We note, finally, that even if there were a comp elling state interest to prevent the perception of corruption or undue influence due to any of the various co ncerns identified here by the defendants -- that is, supporting tob acco legislation, accepting contributions fromtho se appearing before or having interests before one's legislative committee , accepting contributions from supporters outside one's district, or the like -- Act I was notnarrowly tailored to address them. As we have already noted, "[w]here at al l possi ble, government must curtail speech only to the degree necessary to meet th e particular problem at hand, and must avoid infringing on speech that does not pose the danger that has prompted regulation." Massachusetts Citizens for Life , 4 79 U.S. at 265. ActI, however, is at once both overinclusive and underinclusive, by limiting the fre e speech of all who would contribute witho ut addressing the specific concerns identified.

IV. The plaintiffs challenged two provisions relating to the activities of politica l action committees. The firs t of these was a provision, enacted in 1990, that prohibited pe rsons from giving more than $200 each year to any one political action committee

. See Ark. Code Ann. § 7-6-201(9)(B).

State-e nforcedlimits on contributions to political action committees stifle "no t only free political speech, but also free political association," and are reviewe d according to a strict scrutiny standard. Day , 34 F.3d at 1365. We must therefor e determine whether the defendants demonstrated that the provision was n arrowly tailored to address the compelling state interest in avoiding corruption or the appearance o f corruption that stems from large contributions.

We hold that this provision, like the provision that we invalidated in Day , is not narrowly tailored to serve a compelling state interest, because the annual limit is so low as to be different in

kind from the limit approved in Buckley

. See id. at 1366. In Day , we noted that a $100 limit (in 1994 dollars) for contributions to political action-17-

committees was, adjusted for inflation, equal to approximately 4 percent of th e contrib ution limit upheld in Buckley

. Id. Thus, a $200 limit (in 1998 dollars) is equal to no more than 8 percent of the contribution limit approved in Buckley . That limit is also less th an 5 percent, even before any adjustment for inflation, of the $5,00 0 limita tionon contributions to PACs approved by the Supreme Court in Californi a Med ical Association v. Federal Election Commission , 453 U.S. 182, 195-99 (1981 ) (plurality opinion).
There is also less of a danger of quid pro quo corruption, such as the s ort that one migh t presume from large contributions given directly to candidates, when a contribution is given to a PAC that do es not itself wield legislative power. Cf. Day , 34 F.3d at 1365. We believe that a $200 limit (in 1998 dollars) will s ignificantly impair the ability of individuals to exercise their political rights. The limit is simply too low t o allow for appropriately robust participation in protected political speech and association, andthus violates the protections for free political speech and free association that the First Amendment affords.

The plaintiffs also challenged the provision in Act I that permitted small-donor political action committee s to give as much as $2,500 to a candidate (in contrast to the lower limits applicable to contributions by ordinary political action committees). See Ark. Code Ann. § 7-6-203(d); see also Ark. Code Ann. § 7-6-201(a), § 7- 6-201(b). We believe that such differential treatment must be evaluated according to a strict scrutiny stan dard. "Because the right to engage in political expression is fundamental to ou r cons titutionalsystem, statutory classifications impinging upon that right must b e narrowly tailored to serve a compelling governmental interest." Austin v. Michiga n Chamber of Commerce , 494 U.S. 652, 666 (1990).
The defendants argue that the differential treatment of ordinary and small-donor PA Cs is justified because of the difference in regulations as to their method of raising money. The only compelling government interest that might permit this infringement-18-

of First Amendment rights, as we have said, is preventing the reality or perception of undue influence or corruption that might arise from large contributions. As the Supreme Court h as held, "To the extent that large contributions are given to secure a politica l quid pro q uo from current and potential office holders, the integrity of our system o f represen tative democracy is undermined." Buckley , 424 U.S. at 26. Ostensibly t o alleviate t his potential for corruption, Act I limited individuals and ordinary PACs t o giving $300 to certain candidates and $100 to other s (although we note that our holding above returns these limits to their pre-Ac t I limits of $1,000). See Ark. Code Ann. § 7- 6-201(a ), § 7-6-201(b). Act I allowed small-donor PACs, however, to give $2,500 to any candidate. See Ark. Code Ann. § 7-6-203(d). This differential treatment is said to be accep table because small-donor PACs themselves receive that money in contributions of $25 or less, see Ark. Code Ann. § 7-6-201(12)(B).
This explanation, however, is manifestly flawed, because i t focuses on the source of the funds given to a PAC rather than on the entity from which the candidate receives the funds. Because a small-donor PAC receives small donations, it is true that it i s unlikely that any one contributor to a small-donor PAC will be ab le to control that PAC. Ac t I, however, ignored the possibility that the small-donor PAC itself will seek t o con trol a given candidate. A $2,500 contribution would be even more likely t o exacerbat e this difficulty than the $1,000 contribution limit applicable to most othe r contributors. Indeed, if any contribution is likely to give rise to a reasonable perception of undue influence or corruption, it would be one from an entity permitted to contribute two-and-a-half times the amount that most others are allowedto contribute. The smalldonor PAC provision is not, then, narrowly tailored to ser ve the compelling government interest of combating the reality or perception of undue influence or corruption.
We reject th e defendants' argument that the plaintiffs (namely, three individuals and a political action committee) may not assert this equal protection argument because they are not burdene d to a greater extent by this provision than small-donor PACs are.-19-

Ordinary PACs may, it is true, raise more money per contribution than a small-dono r PAC , but the issue is their ability to speak freely by contributing money to candidates for office. Insofar as that freedom is at issue, the ordinary PACs are burdened mor e thanthe small-donor PACs, because ordinary PACs may donate only the amount that individuals may donate, while small-donor PACs may donate $2,500. W e believe, then, thatthe plaintiffs here meet the requirements set forth in California Medica l Association , 453 U.S. at 200.

V. The plaintiffs also challenged the constitutionality of Ark. Code Ann. § 7-6-224. This provis ion states only that local governments "shall have the authority to establish reasonable limitations" on campaign contributions and expenditures, and appears to be simplyan allocation by the state of Arkansas of certain of its plenary powers to local go vernments: It does not set any specific limits on campaign contributions o r expenditures , and thus cannot restrict the First Amendment freedoms of any person or entity seeking to contribute to or spend the revenues of a political campaign. Were a local government to exercise the power granted it by § 7-6-224, its action might then be challenged in the same manner as the actions of the defendants were challenged in this suit. But no such action has yet been taken and brought to the attention of a court. Ark. Code Ann. § 7-6-224 thus does not present a federal constitutional controversy that is ripe for adjudication at this time.

VI. Those provisions of the Arkansas sta tutes in conflict with our analysis above are unconsti tutionaland unenforceable. We must now determine whether the invali d provisions of Act I may be severed from the remainder of its provisions.
Severability is a matter of state law. Leavitt v. Jane L. , 518 U.S. 1 37, 139 (1996) ( per curiam ). The Supreme Court of Arkansas looks to two considerations to determine severability: "(1) whether a single purpose is meant to be accomplished by-20-

the act; and (2) whether the sections of the act are interrela ted and dependent upon each oth er." U.S. Term Limits, Inc. v. Hill , 872 S.W.2d 349, 357 (Ark. 1994). The court provided further guidance, moreover, in its obs ervation that "it is important whether the portion of the act rem aining is complete in itself and capable of being executed wholly independent of that which was rejecte d." Id. at 358. A severability clause, such as the one provided in Act I, is relevant but not determinative of whether individual provisions of the act will be considered severable. Id

. Applying the principles set forth in U.S. Term Limits , we find no single purpose behind Act I with which our ruling could interfere. Act I provided for a series o f campaign finance reforms, including the independent expenditure committee and certain tax provisi ons, that remain unaffected by the outcome of this case. We can find n o re ason not to honor the intent of the drafters of Act I that, to the extent possible, it s various provisions should stand on their own.

VII. We therefore affirm in part and reverse in part the judgment of the trial court. We remand the case to the district court for the entry of declaratory and injunctive relie f consistent with this opinion.
A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.