June 27, 2011 -- In its first major campaign finance ruling since the case of Citizens United, a divided Supreme Court today struck down a key provision of an Arizona public financing law.

The law allowed candidates who qualified for public financing to receive a lump sum grant from the government if they refused to accept private contributions. It also allowed participating candidates to qualify for additional matching government funds if their opponents who chose not to participate in public funding spent more than the initial grant.

In its opinion, the majority targeted the so-called "trigger mechanism," which aimed to direct more public money to qualified candidates, and found that it violated the free speech rights of nonparticipating candidates.

Chief Justice John Roberts, writing for himself and the four other conservatives on the bench, stated that the matching funds provision "substantially burdens the speech of privately financed candidates and independent expenditure groups without serving a compelling state interest."

He said that laws "like Arizona's matching funds provision that inhibit robust and wide-open political debate without sufficient justification cannot stand."

But Justice Elena Kagan, who argued the Citizens United case on behalf of the government before she became a Supreme Court justice, issued a forceful dissent on behalf of herself and Justices Ruth Bader Ginsburg, Sonia Sotomayor and Stephen Breyer.

She emphasized that the law was passed to stem corruption.

"The First Amendment's core purpose is to foster a healthy, vibrant, political system full of robust discussion and debate" she wrote.

Kagan, who took the unusual step of reading her dissent from the bench, said: "No fundamental principle of our Constitution backs the court's ruling; to the contrary, it is the law struck down today that fostered both the vigorous competition of ideas and its ultimate object -- a government responsive to the will of the people. Arizona deserves better."

The Arizona law, called the Citizens Clean Elections Act, was passed in 1998 following a string of corruption scandals in the state. The ruling will affect public financing laws in several other states with similar trigger mechanisms, but it won't affect those public financing systems, such as the presidential system, that do not. The ruling leaves standing a 1976 Supreme Court decision that found public financing in general was constitutional.

Supporters of the law argued it helped to prevent corruption, and also encouraged candidates to accept public financing to promote competition in races. The matching funds provided by the government were capped at three times the initial grant.

But opponents said it violated the free speed rights of nonparticipating candidates.

"The court's decision today, like other recent decisions, makes clear that the First Amendment is not an exception to campaign finance laws; it is the rule," said William R. Maurer, an attorney with the Institute for Justice, who represented the Arizona Free Enterprise Club, a political action committee that opposed the law.

"As a result of today's ruling, government can no longer use public funds to manipulate speech in campaigns to favor government-funded political candidates and turn the speech of traditionally funded candidates into the vehicle by which their entire political goals are undermined."

Maurer said that the court's decision was an attempt to "level the playing field" and worked as a disincentive for candidates to exercise their First Amendment rights.

"What this case is about is whether the government can turn my act of speaking into the vehicle by which my political opponents benefit with direct government subsidies," Maurer said.

Proponents of campaign finance reform say that while today's decision will damage those public financing systems with a triggering mechanism, it doesn't affect other public financing systems.

"In another seriously misguided campaign finance decision, the Supreme Court today by a 5-4 vote has misinterpreted the Constitution to hold unconstitutional a form of public financing of elections enacted by the voters of Arizona to prevent government corruption," said Fred Wertheimer of Democracy 21.

But he added, "As wrong as the court's decision today is, however, it does not cast any doubt on the continued viability or constitutionality of a number of other existing public financing systems that do not include "trigger funds" or similar provisions.