Mass. Revolt

Suit asks Supreme Court to review campaign finance exemptions for unions

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December 9, 2018

A lawsuit is asking the Supreme Court to overturn a Massachusetts rule that prohibits companies from campaign contributions while exempting unions from similar restrictions.

The pro-free market Goldwater Institute and Massachusetts Fiscal Alliance petitioned the high court to review the Massachusetts Supreme Judicial Court's unanimous ruling approving campaign finance restrictions placed on for-profit businesses. The state court ruled in 1A Auto, Inc. and 126 Self Storage, Inc. v. Sullivan that the law did not infringe on the First Amendment rights of employers by preventing them from making contributions directly or indirectly on behalf of state or local candidates. While acknowledging that the Supreme Court declared unconstitutional a federal ban on independent expenditures inn Citizens United, the Massachusetts justices said it did not overturn the 2003 Beaumont decision affirming limits on corporate contributions.

"The Court reaffirmed the key distinction between contributions and independent expenditures, emphasizing that contributions present a special risk of quid pro quo corruption because, unlike independent expenditures, they are coordinated with candidates," the September ruling says. "Experience confirms that, if corporate contributions were allowed, there would be a serious threat of quid pro quo corruption."

The plaintiffs urge the Supreme Court to overturn the state court's decision in light of Citizens United and other federal court rulings since 2003. The filing says the nation's highest court needs to clarify the First Amendment protections granted to for-profit entities and overturn the Beaumont decision. The Massachusetts ban on corporate contributions directly to candidates, as well as the ban on third party spending through political action committees, violates the same free speech and association rights as the prohibition of independent expenditures in the Citizens United case, according to the suit.

"The Court has spoken clearly on these principles, lower courts nonetheless lack clarity on how they should analyze challenges to certain types of campaign-finance restrictions that the Court’s recent decisions have not directly addressed," the petition says. "Although this Court has condemned laws that favor some political speakers over others, the lower courts still give discriminatory contribution limits minimal scrutiny for lack of specific guidance from this Court."

A spokesman for the Massachusetts Office of Campaign and Political Finance—the agency that is party to the suit—declined to comment on the petition, instead directing the Washington Free Beacon to a November newsletter on the suit from Director Michael Sullivan. Sullivan defended the law saying corporate contribution regulations have been in place for more than a century and that unions also face regulations since they are capped at contributions of $15,000 or 10 percent of their General Funds, whichever is less.

"The state's ban on direct corporation contributions to candidates dates to 1907," Sullivan said in the newsletter.

The plaintiffs argue that the rules need to be updated to reflect the equal rights of labor organizations and employers. Massachusetts regulators solidified the union exemption in 1986, rather than 1907. The state judgment's focus on quid pro quo for for-profit enterprises ignored the fact that unions may have similar financial conflicts of interest, according to Massachusetts Fiscal Alliance spokesman Paul Diego Craney.

"This past September's ruling was a missed opportunity for advocates of campaign finance reform," he said in a statement. "Employers and unions are two sides of the same coin, and they should be treated as such. It’s a fundamental issue of fairness, and the time to bring equity to the situation is now."

Jacob Huebert, a senior attorney at the Arizona-based Goldwater Institute, said the Supreme Court needs to weigh in on the case to create equal standards for all political actors. Employers may be able to express their political support for federal candidates, but they are stifled when it comes to electing their neighbors. The rules give labor groups an advantage in seeing their advocates assume office and advance their policies.

"Massachusetts and other states have used campaign-finance rules to tilt the political playing field to favor some groups and ideas over others. And, unfortunately, courts have mostly let them get away with it," Huebert said in a release. "We're asking the Supreme Court to take this case to end this unfairness and make sure states respect everyone's equal right to participate in politics."

The Massachusetts Attorney General's office, which defended the campaign finance law before the state court, did not respond to request for comment.

Published under: Campaign Finance , Unions