May 20, 2019 •
On Monday, the Supreme Court of the United States announced it would decline to hear a challenge to a Massachusetts law. The law in question bans corporate contributions to campaigns, parties and candidate-focused political action committees. The Massachusetts Supreme Judicial […]
On Monday, the Supreme Court of the United States announced it would decline to hear a challenge to a Massachusetts law.
The law in question bans corporate contributions to campaigns, parties and candidate-focused political action committees.
The Massachusetts Supreme Judicial Court unanimously rejected the challenge, brought by 1A Auto Inc. and 126 Self Storage Inc., in September.
The suit claimed disparate treatment by banning for-profit corporate contributions while allowing significant contributions by unions and nonprofits.
After the Supreme Court ruling in Citizens United, state law was updated to allow corporate spending for independent expenditures but not political contributions.
Massachusetts Attorney General Maura Healey applauded Monday’s decision not to hear the case for the integrity of state elections.
Opponents of the law are hopeful the Supreme Court will take up the issue in another case.
September 7, 2018 •
The Massachusetts Supreme Judicial Court ruled unanimously to uphold the state’s prohibition on corporate contributions this week. Rick Green, the republican nominee for the state’s 3rd Congressional District seat, owns 1A Auto Inc., one of the companies asserting the ban […]
The Massachusetts Supreme Judicial Court ruled unanimously to uphold the state’s prohibition on corporate contributions this week.
Rick Green, the republican nominee for the state’s 3rd Congressional District seat, owns 1A Auto Inc., one of the companies asserting the ban discriminated against businesses’ right to free speech.
In upholding the ban, the Court stated allowing corporate contributions would create “a serious threat of quid pro quo corruption.”
The Massachusetts contribution ban applies to corporations and business entities but does not extend to unions or nonprofits.
Attorneys for Green and 1A have stated their intention to petition the US Supreme Court to hear the case.
September 16, 2016 •
On September 15, the Federal Election Commission (FEC) was unable to agree on a policy to clarify when and if a U.S. domestic subsidiary corporation of a foreign national is illegally involved in political activity. Federal law prohibits foreign nationals […]
On September 15, the Federal Election Commission (FEC) was unable to agree on a policy to clarify when and if a U.S. domestic subsidiary corporation of a foreign national is illegally involved in political activity.
Federal law prohibits foreign nationals from directly or indirectly making contributions, donations, expenditures, independent expenditures, and disbursements in connection with federal, state, or local elections. FEC regulations also prohibit foreign nationals from directing, controlling, or participating in the decision-making process of any person, such as a corporation, with regards to decisions concerning the making of contributions, donations, expenditures, or disbursements in connection with elections in the U.S.
Additionally, the FEC was unable to reach an agreement on the creation of a safe harbor for political committees to accept corporate contributions deemed not to have come from foreign national sources.
September 12, 2016 •
The South Dakota panel assembled by Secretary of State Shantel Krebs to review campaign finance laws showed support of a proposal to allow direct contributions from individual organizations like businesses and labor unions. The panel met Tuesday, September 6 and […]
The South Dakota panel assembled by Secretary of State Shantel Krebs to review campaign finance laws showed support of a proposal to allow direct contributions from individual organizations like businesses and labor unions.
The panel met Tuesday, September 6 and will meet two more times before finalizing proposals that will be requested from the Legislature in January. The panel is also expected to propose new campaign finance reporting requirements.
May 18, 2016 •
On May 17, a bill to amend the Election Finances Act was introduced in the Legislative Assembly of Ontario. Bill 201, the Election Finances Statute Law Amendment Act, 2016, which also includes amendments to the Taxation Act, 2007, bans corporate […]
On May 17, a bill to amend the Election Finances Act was introduced in the Legislative Assembly of Ontario.
Bill 201, the Election Finances Statute Law Amendment Act, 2016, which also includes amendments to the Taxation Act, 2007, bans corporate and union donations to political parties. The legislation will also limit contributions from individuals, limit spending for third-party advertising, and tighten political party spending and fundraising rules for by-elections.
If passed, the changes are hoped to be in place or significantly underway before the June 2018 election, with initial changes legislated for January 1, 2017.
May 10, 2016 •
The Elections Committee approved a bill to reduce the corporate contribution limit from $5,000 to $1,000 per year and to close a loophole permitting political contributions from limited liability companies. Senate Bill 60, introduced by Sen. Daniel Squadron in 2015, […]
The Elections Committee approved a bill to reduce the corporate contribution limit from $5,000 to $1,000 per year and to close a loophole permitting political contributions from limited liability companies. Senate Bill 60, introduced by Sen. Daniel Squadron in 2015, passed the committee this week, while a parallel bill was being passed in the Assembly.
In response to recent political scandals across the state, those supporting the bill are calling for an up-or-down Senate vote by the end of the legislative session.
April 4, 2016 •
The Kentucky Registry of Election Finance (KREF) cannot enforce the state’s constitutional prohibition on corporate contributions, according to a federal judge. U.S. District Judge Gregory F. Van Tatenhove concluded the rule to be a violation of the Equal Protection Clause […]
The Kentucky Registry of Election Finance (KREF) cannot enforce the state’s constitutional prohibition on corporate contributions, according to a federal judge. U.S. District Judge Gregory F. Van Tatenhove concluded the rule to be a violation of the Equal Protection Clause because it prohibits corporate contributions while allowing other organizations, such as labor unions, to make contributions.
The case, Protect My Check, Inc. v. Dilger, grew out of right-to-work legislation. Labor unions who opposed the bill were allowed to make political contributions while a non-profit corporation, in favor of the measure, were not. The judge, however, rejected a First Amendment, free speech argument for allowing political contributions.
KREF stated it is still reviewing the opinion and is weighing its options.
November 2, 2015 •
Q. Are there any rules that pertain to making contributions in the weeks leading up to an election? A. With local elections in 2015 and the upcoming 2016 elections, it is wise to know what the rules are when making […]
Q. Are there any rules that pertain to making contributions in the weeks leading up to an election?
A. With local elections in 2015 and the upcoming 2016 elections, it is wise to know what the rules are when making contributions in the days and weeks leading up to an election. Usually, there is a monetary threshold that must be exceeded, and typically there is a short turnaround time to disclose the contribution, usually within 24 hours. In some instances, there is an outright ban on contributions.
In California, contributions of $1,000 or more per candidate made by a major donor during the 90-day period before an election must be disclosed within 24 hours of making the contribution. Contributions to ballot measure committees and political party committees are also included within this reporting requirement. The candidate and the ballot measure committee must be on the ballot at the election for which the 90-day period applies. California’s 90-day pre-election period is the longest in the country. If numerous special elections are being held, the 90-day periods may overlap.
In Washington, a contribution of $1,000 or more per candidate made by a registered lobbyist during the 21 days before an election must be disclosed within 24 hours of making the contribution. This includes contributions to candidates and ballot measures appearing on the ballot at the election for which the 21-day period applies, as well as contributions to political party committees and PACs. The Washington Public Disclosure Commission has a link on its home page that allows for the electronic filing of this report.
In Florida, opposed candidates must return contributions received less than five days prior to an election.
In Tennessee, a PAC is prohibited from making a contribution to a candidate for state office after the 10th day before an election until the day of the election.
These are just a few examples. As we always advise, verify the rules in your state before making political contributions.
You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: email@example.com.
(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.
July 23, 2015 •
The Brennan Center for Justice, on behalf of several New York lawmakers, filed suit against the New York State Board of Elections, challenging a 1996 board ruling that treats limited liability companies (LLCs) as individuals. The ruling has the result […]
The Brennan Center for Justice, on behalf of several New York lawmakers, filed suit against the New York State Board of Elections, challenging a 1996 board ruling that treats limited liability companies (LLCs) as individuals. The ruling has the result of creating a loophole allowing LLCs to circumvent stricter contribution limits imposed upon other business entities, namely partnerships and corporations.
The board had an opportunity to overturn its 1996 ruling at its April 2015 board meeting, but board members split along party lines to uphold the ruling, thus prompting the Brennan Center for Justice to file suit.
Plaintiffs allege the LLC loophole allows special interest groups to funnel tens of millions of dollars into political campaigns without transparency. Corporate contributions are limited to $5,000 per calendar year; partnerships are limited to $2,500 per calendar year at the partnership entity level. Under the 1996 board ruling, LLCs can contribute substantially more than other business entities because they are treated as individuals.
The lawsuit was filed in the Supreme Court of New York, County of Albany.
July 16, 2015 •
Initiative 122, a ballot measure proposing to raise property taxes in Seattle to create a publicly financed elections program, will appear on the general election ballot in Seattle. If passed, the “Honest Elections Seattle” measure would impose a $30 million […]
Initiative 122, a ballot measure proposing to raise property taxes in Seattle to create a publicly financed elections program, will appear on the general election ballot in Seattle. If passed, the “Honest Elections Seattle” measure would impose a $30 million tax levy over a 10 year period, granting citizens four $25 “democracy vouchers” to use towards the campaigns of city candidates.
Initiative 122 would also ban contributions from corporations with medium-sized and large city contracts as well as corporations who lobby city officials. Contribution limits would also be lowered under the measure, from $700 per election cycle to $500.
Voters in Seattle will have an opportunity to approve or deny Initiative 122 on November 3, 2015, at the regularly scheduled general election.
April 2, 2014 •
Today, in McCutcheon v. Federal Election Commission (docket 12-536), the United States Supreme Court ruled aggregate limits on federal campaign contributions are an unconstitutional violation of the First Amendment’s guarantee of political expression and association. Background: Federal law imposes two […]
Today, in McCutcheon v. Federal Election Commission (docket 12-536), the United States Supreme Court ruled aggregate limits on federal campaign contributions are an unconstitutional violation of the First Amendment’s guarantee of political expression and association.
Federal law imposes two types of limits on individual political contributions.
Base limits restrict the amount an individual may contribute to:
- A candidate committee;
- A national party committee;
- A state, local, and district party committee; and
- A political action committee.
Biennial limits restrict the aggregate amount an individual may contribute biennially to:
- Candidate committees; and
- All other committees.
Shaun McCutcheon is an Alabama businessman who regularly makes political contributions to Republican candidates and the Republican National Committee. McCutcheon wanted to contribute $26,200 more to candidates and committees than the aggregate ceiling would allow. The Republican National Committee was also a plaintiff in the suit.
McCutcheon did not challenge the base limits on contributions to individual candidates and entities, but, wanting to give to more candidates and political entities than allowed by law, he challenged the aggregate limits.
In a 5-4 decision, with the majority joined by Justice Thomas in a separate concurring opinion, the Court found aggregate limits do not further the permissible government interest in preventing quid pro quo corruption or the appearance of such corruption.
The majority opinion, written by Chief Justice Roberts and joined by Justices Scalia, Kennedy, and Alito, found the aggregate contribution limits do not further the only governmental interest accepted as legitimate in Buckley v Valeo. The 1976 decision by the U.S. Supreme Court found aggregate limits to be a permissible government regulation to curtail corruption or the appearance of corruption.
In McCutcheon, the Court stated, “Congress may not regulate contributions simply to reduce the amount of money in politics.”
The Court equated political contributions with “political campaign speech,” writing, “Money in politics may at times seem repugnant to some, but so too does much of what the First Amendment vigorously protects. If the First Amendment protects flag burning, funeral protests, and Nazi parades—despite the profound offense such spectacles cause—it surely protects political campaign speech despite popular opposition.”
Effect on other jurisdictions: (updated June 16, 2014)
The McCutcheon decision’s effects extend beyond the federal campaign finance laws.
At its May 14, 2014 meeting, the Connecticut State Elections Enforcement Commission announced it would no longer enforce the state’s aggregate contribution limit absent further direction from the General Assembly or a court of competent jurisdiction. The commission stressed, however, the base contribution limits would remain in full force and effect.
In a policy statement dated June 4, 2014, the Maine Commission on Government Ethics and Practices stated it would no longer enforce the yearly $25,000 aggregate contribution limit applicable to individuals and entities contained in Maine Revised Statutes section 1015(3), barring guidance from the legislature or a court. The policy statement noted the commission’s intention to study the issues and perhaps propose legislation during the next legislative session.
The Maryland State Board of Elections issued a guidance memo stating the board would no longer enforce a $10,000 aggregate limit on donors’ contributions to state candidates during a four-year election cycle, while stressing the $4,000 limit on personal contributions to any one candidate was still in place.
The Massachusetts Office of Campaign and Political Finance (OCPF) announced it will no longer enforce the state’s $12,500 aggregate limit on the amount an individual may contribute to all candidates, but will continue to enforce the $5,000 aggregate limit on contributions by individuals to party committees.
A provision in Minnesota’s campaign finance law known as the “special sources limit” will no longer be enforced as applied to individual large donors. U.S. District Judge Donovan Frank issued a preliminary injunction barring enforcement of the law with respect to individual large donors in response to a challenge by the Institute for Justice on First Amendment grounds. Under section 10A.27(11) of the Minnesota Statutes, the special sources limit prohibits a campaign from raising more than 20 percent of its total contributions from lobbyists, political committees, and large donors contributing more than one half of the individual contribution limit. Donovan issued the injunction in light of the precedent set by McCutcheon. The defendants have the opportunity to appeal to the 8th U.S. Circuit Court of Appeals. If they choose not to appeal, the case will proceed to a final ruling at the district court level.
The U.S. District Court for the Southern District of New York struck down a campaign finance law limiting contributions to super PACs. Sections 14-114(8) and 14-126 of the New York Election Law imposed an annual aggregate contribution limit of $150,000 per contributor. Plaintiff New York Progress and Protection PAC challenged the aggregate contribution limits on First Amendment grounds. Citing the precedent established in Citizens United and McCutcheon, the judge enjoined New York’s aggregate contribution limit as an unconstitutional ban on free speech. In its May 2014 meeting, the State Board of Elections determined the $150,000 yearly aggregate limit on political contributions from individuals can no longer be enforced in light of recent federal court decisions. New York campaign finance law imposes a similar aggregate limit of $5,000 on a corporation’s yearly contributions. The board made no ruling with regard to the corporate limit; however that limit is being challenged in federal court.
On April 3, 2014, the Puerto Rico Office of the Electoral Comptroller issued an informational newsletter in light of the U.S. Supreme Court ruling. While the Court referenced similar aggregate limits in other states and jurisdictions, it did not go so far as to declare them unconstitutional. Therefore, the office is not taking any immediate action with regard to the Puerto Rico aggregate campaign finance limits established in 2011. It will request an opinion from the Puerto Rico Secretary of Justice to determine how the Court’s decision relates to Puerto Rico law. The office will issue new informational bulletins as further developments arise.
On April 16, 2014, the Rhode Island Board of Elections voted to support the creation of legislation eliminating aggregate political contribution limits. The vote was in reaction to the McCutcheon decision. State law currently prohibits an individual from making contributions of more than $10,000 in the aggregate to more than one candidate, political action committee (PAC), or political party committee or to a combination of candidates, PACs, and political party committees within a calendar year.
In Vermont, Senate Bill 82 added an aggregate contribution limit of $40,000 per election cycle, which was to take effect January 1, 2015. However, the implementation of the aggregate contribution limit was contingent on the Supreme Court ruling in favor of aggregate limits in McCutcheon. Because the Supreme Court in fact ruled against aggregate limits, Vermont’s aggregate limit will not go into effect.
Wisconsin’s aggregate limits had already been challenged in Young v. Government Accountability Board. The parties in that case agreed to put the case on hold until the McCutcheon decision was issued. Following the ruling, the Government Accountability Board reached a settlement in which it agreed the aggregate contribution limits for individuals and PACs contributing to state candidates were no longer enforceable.
The Wyoming Joint Corporations, Appropriations, and Political Subdivisions Interim Committee ordered a draft bill to repeal the state’s aggregate contribution limits, which conflict with the U.S. Supreme Court’s ruling in McCutcheon.
In light of the ruling in McCutcheon, the Los Angeles Ethics Commission announced it would no longer enforce the aggregate limits on contributions to city and school board candidates. Limits on contributions to individual candidates remain in place.
The San Francisco Ethics Commission adopted a resolution stating it will not enforce the aggregate limit on contributions to city candidates in light of the McCutcheon ruling. The Campaign and Governmental Conduct Code imposes an aggregate limit of $500 multiplied by the number of city elective offices to be voted on in the election. The city’s $500 limit on contributions from an individual to a single city candidate remains in full force.
Quid pro quo corruption narrowly defined:
The Court maintained a narrow definition of quid pro quo corruption, preventing the government from limiting the First Amendment right to make contributions to as many candidates as an individual would like, within the base limits of contributions.
In the decision, the Court marked a solid delineation between corruption and appreciation: “[T]here is a clear, administrable line between money beyond the base limits funneled in an identifiable way to a candidate—for which the candidate feels obligated—and money within the base limits given widely to a candidate’s party—for which the candidate, like all other members of the party, feels grateful. . . . To recast such shared interest, standing alone, as an opportunity for quid pro quo corruption would dramatically expand government regulation of the political process.”
The Court found the possibility that an individual who spends large sums may garner “influence over or access to” elected officials or political parties does not give rise to such quid pro quo corruption.
The Court wrote, “The Government may no more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse.”
Arguing against the dissent’s argument that corruption could still occur even without the circumvention of the base contribution limits, the majority found such an argument would broaden the definition of quid pro quo corruption. The Court stated the dissent’s interpretation “dangerously broadens the . . . definition of quid pro quo corruption . . . and targets as corruption the general, broad-based support of a political party.”
Circumvention of base limits:
The Court found the argument that aggregate contributions could circumvent base contribution limits unconvincing.
The majority said the basis for allowing the law on aggregate limits to stand falls on “speculative” scenarios of corruption, which the Court found “highly implausible” and “hard to believe.” The Court said “experience and common sense” foreclose on many of the scenarios of schemes to funnel money, including one scenario the District Court found had merit. The Court found, “Based on what we can discern from experience, the indiscriminate ban on all contributions above the aggregate limits is disproportionate to the Government’s interest in preventing circumvention.”
The Court stressed that once an individual reaches the aggregate limit, the law denies “the individual all ability to exercise his expressive and associational rights by contributing to someone who will advocate for his policy preferences.”
The Court also argued disclosure of contributions “minimizes the potential for abuse of the campaign finance system.”
The majority maintained lifting the aggregate limits encourages money away from entities not subject to disclosure: “Individuals can, for example, contribute unlimited amounts to 501(c) organizations, which are not required to publicly disclose their donors.”
Citing Citizens United, Justice Roberts wrote, “Disclosure requirements burden speech, but—unlike the aggregate limits—they do not impose a ceiling on speech.” In Citizens United, the Court held 8-1 that laws requiring the disclosure of political contribution were constitutional.
Legislative alternatives suggested by the Court:
The majority opinion suggested Congress could create other legislation to curtail circumvention of the base limits, such as enacting legislation targeting restrictions on transfers among candidates and political committees.
Additionally they wrote, “Congress might also consider a modified version of the aggregate limits, such as one that prohibits donors who have contributed the current maximum sums from further contributing to political committees that have indicated they will support candidates to whom the donor has already contributed.”
Overturning Buckley v Valeo’s holding on aggregate limits:
In overturning the 1976 U.S. Supreme Court Buckley v Valeo’s ruling on aggregate limits, the Court found the 38-year-old decision did not thoroughly address aggregate limits in its analysis. The Court also found subsequent laws enacted have “considerably strengthened” statutory safeguards against circumventing base limits through the transfer of contributions between parties and political committees. Additionally the Court argues Buckley did not address the “overbreadth challenge” with respect to the aggregate limits.
The Court rejected an alternative provided in the Supreme Court’s prior Buckley decision finding a person could personally volunteer for a candidate. The majority found “personal volunteering is not a realistic alternative for those who wish to support a wide variety of candidates or causes.”
The Court also heavily relied on campaign finance cases decided in the last few years, such as Citizens United v FEC and Arizona Free Enterprise Club’s Freedom Club PAC v Bennett.
Justice Thomas, in his separate opinion concurring with the majority ruling, writes Buckley “denigrates core First Amendment speech and should be overruled.”