Minnesota’s recent campaign finance law, which generated headlines — and headaches — for Minnesota companies during the 2010 gubernatorial campaign, will take center stage in a St. Louis courtroom today in a high-profile attempt to overturn the statute.
In a case, known as Swanson v. Minnesota Citizens for Life, lawyers will face off before the full 11-member bench on the Eighth Circuit Court of Appeals.
The issues before the court will focus on Minnesota’s ban on corporations making direct contributions to candidates and political parties and on the reporting and disclosure requirements the law imposes on corporate contributions to the independent committees that the statute allows.
The appeal follows a 2-1 ruling last spring by a three-judge panel that refused to overturn a lower-court decision that refused to block implementation of the law before the 2010 election campaigns.
The Minnesota law was passed last year following the controversial 2010 U.S. Supreme Court Citizens United ruling that found corporate and union contributions to independent political committees constitute protected free speech.
The Minnesota law’s chief sponsor, State Rep. Ryan Winkler, DFL–Golden Valley, said the measure passed unanimously after “the Supreme Court made a very clear policy decision for the country. [The court] said, ‘Less restriction and more disclosure.’ ”
Because of then-existing state law prohibiting corporate contributions to candidates for state office, “Minnesota had to jump out ahead” on the issue, Winkler said. The legislation drew broad bipartisan support and passed unanimously with backing from civic and business groups alike, including Common Cause, the League of Women Voters, the Minnesota Business Partnership and the Minnesota Chamber of Commerce.
“Minnesota has a strong clean-government, clean-politics tradition,” Winkler said. “I would argue that our political culture comes from the people who live here, not from the laws we have on the books. The laws we have reflect our political culture, not the other way around.”
Attorney James Bopp, who will be arguing against Minnesota’s statute, said, “Obviously [the Circuit Court] views it important enough and potentially wrong enough that they decided to rehear it with the full court.”
A well-known conservative lawyer, Bopp said the court should apply a “strict scrutiny” test in examining Minnesota’s statute. Under that test, the court would allow very few restrictions on free speech, only in support of a “compelling government interest.” In the case of political donations, Bopp argues that preventing the corruption of candidates is the only government interest that applies.
By imposing periodic reporting and administrative requirements on corporations and independent committees, Minnesota’s statute is “much more burdensome,” he argues, than what is allowed under a strict-scrutiny test.
Because the Minnesota statute only allows corporate contributions to independent committees but not directly to candidates, Bopp argues that disclosure of corporate contributions should not be required.
Citing the controversy sparked by Target Corp.’s $150,000 donation to MN Forward, which supported Republican Tom Emmer’s campaign for governor, Bopp said: “I don’t object, and I think the state can require contributions to candidates to be reported. That’s not what Target did. Target contributed to another organization. That organization contributed to a candidate.”
Minnesota Solicitor General Alan Gilbert said that Minnesota’s statute serves a “two-fold purpose,” upholding the informational interest of voters and shareholders alike. A broader “exacting scrutiny” standard applies, Gilbert argues, which recognizes several important interests justifying restrictions on speech, he said.
“We feel very strongly that disclosure is not only appropriate but necessary. The Supreme Court said the same thing,” voting 8 to 1 in favor of disclosure requirements in its Citizens United opinion, Gilbert added.
David Olson, president of the Minnesota Chamber, said his organization supported the legislation in order to clarify rules Minnesota corporations would operate under following the Citizens United decision and “because in Minnesota, it’s been very hard for companies to [make] any contributions to candidates.”
The MN Forward experience represents “a new frontier for the business community,” Olson said. He vowed that the Chamber will continue to raise corporate money for elections. “I think business deserves a voice.” The business community is outspent by labor union donations, which do not have the same restrictions, he said.
Olson still supports the Minnesota statute but “not necessarily the disclosure piece.”
The U.S. Chamber of Commerce has been vigorously opposing any disclosure requirements for corporate political contributions. While Minnesota is a dues-paying member of the national organization, Olson said he “didn’t have too many conversations” with the U.S. Chamber about the Minnesota statute.
In his brief supporting Minnesota’s statute before the Appeals Court, Solicitor General Gilbert quoted the Supreme Court ruling in Citizens United:
With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests. The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
Ironically, other events may make the case for legislatively mandated disclosure requirements moot, at least at larger corporations.
There is an increasing move on the part of corporations to voluntarily disclose those donations and a push by shareholders to demand greater transparency. Some companies, looking at the experience of Target, are choosing to forgo political donations altogether, and 10 prominent law school professors petitioned the Securities and Exchange Commission to require board oversight and disclosure of political donations and policies.
I’ll write more on those trends later.
Minnesota Solicitor General Alan Gilbert’s name was misstated in the original version of this story.