Key Win in the Fight Against Corporate Corruption in Politics

The Massachusetts Supreme Judicial Court recently upheld one of the Commonwealth’s most critical tools in protecting the integrity of its elections: a century-old ban on corporate contributions to state and local candidates. In reaching its decision in 1A Auto v. Sullivan, the court noted that its ruling would be consistent with Supreme Court precedent, every Federal circuit court decision that has considered a constitutional challenge to laws banning corporate contributions since Citizens United, as well as federal law and the laws of 21 other states.

Given the established legal precedents underlying the decision, it’s an unsurprising victory, but in the post-Citizens United landscape in which corporate-backed think tanks like the Goldwater Institute are engaged in a systematic effort to challenge these protections, the decision stands as a bulwark against a coordinated attack by corporate interests to subvert the Constitution for their own ends. Moreover, the decision highlights yet another key governmental interest underlying the statute in question.

For well over a century, federal and state laws have banned corporate contributions to candidates. The United States Supreme Court upheld the federal prohibition in Federal Election Commission v. Beaumont citing no less than four important government interests advanced by the law:

  1. Preventing corruption and the appearance of corruption;
  2. Protecting the interests of dissenting shareholders who did not support the same candidates as the corporation’s management;
  3. Preventing individuals from using the corporate form to circumvent limits on individual contributions to candidates; and
  4. Countering the misuse of corporate advantages by combating quid pro corruption and undue influence.

Despite the fact that corporations have numerous other avenues to participate in Massachusetts politics, the Goldwater Institute claimed that the ban on direct contributions violated the corporate plaintiffs’ First and Fourteenth Amendment rights under the U.S. Constitution.  The Court firmly grounded its decision in well-settled precedent in rejecting each of the Goldwater Institute’s claims.

Following the straightforward precedent set forth in Beaumont, the Supreme Judicial Court emphasized the key distinction between contributions and independent expenditures established in Buckley v. Valeo and reaffirmed by Citizens United. As the Court explained, unlike limits on independent expenditures which are reviewed under strict scrutiny, contribution limits are reviewed under a less rigorous standard because they are viewed as only a “marginal restriction” upon speech. As a result, contribution limits are upheld so long as they are “closely drawn” to match a “sufficiently important interest.” Based upon the law and the record in Massachusetts, the Court concluded that such an important interest was at stake here:

Both history and common sense have demonstrated that, when corporations make contributions to political candidates, there is a risk of corruption, both actual and perceived.  

The Court also saw through the plaintiffs’ equal protection arguments as a cynical attempt to “reframe their First Amendment challenge, to effect an end run around the Supreme Court’s well-established distinction between independent expenditure limits, which trigger strict scrutiny, and contribution limits, which do not.” Unfortunately, corporate attempts to undo legitimate regulations by advancing specious Fourteenth Amendment arguments is nothing new as we explained in a recent report, Contaminating the Courts. That’s why the Supreme Judicial Court’s ruling on this argument also represents an important precedent in considering corporate equal protection claims. Few courts have spoken with such clarity as the Court did here:

For equal protection purposes, strict scrutiny is warranted only where a law implicates a suspect class or burdens a fundamental right. Corporations are not a suspect class.

The Massachusetts court’s decision is also important for the additional groundwork laid in Justice Budd’s concurrence. In assessing whether the state has a “sufficiently important interest” in regulating corporate contributions, Justice Budd points to Article 5 of the Massachusetts Constitution which creates an agency relationship between the people and their representatives. Justice Budd goes on to explain how a system that creates a “donor class” separate and distinct from “the people” competes with Article 5’s directive that elected officials should act in the interest of their principals. This argument also expands the bounds of what constitutes “the appearance of corruption” by tying it to the strain that campaign contributions impose on the agency relationship contemplated by Article 5, and therefore implicates the very “form and character of our representative democracy itself.”

Finally, although the court did not take up the argument raised by Free Speech For People and Common Cause in a joint amicus brief because neither of the parties had briefed it, that argument could be crucial to holding off a challenge at the U.S. Supreme Court. One of the key arguments raised by the corporate challengers here was that Massachusetts law treated corporations and labor unions differently, allowing labor unions to contribute up to $15,000 a year to a single candidate. The basis for that differential treatment, however, was not the law itself but an “interpretive bulletin” issued by the Massachusetts Office of Campaign Finance. Free Speech For People and Common Cause argued that the court could avoid the constitutional question entirely by either remanding the case to the trial court to address the interpretive bulletin, or striking down the interpretive bulletin as inconsistent with the statute.

Free Speech For People congratulates the Commonwealth of Massachusetts for prevailing at this critical stage of the litigation. The Goldwater Institute may try to pursue its case further, but the Supreme Judicial Court has delivered an unassailable decision in this latest round of the corporate assault on one of the last remaining limits against corporate money in our elections.

 

 

 

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