Mass. High Court Upholds Ban On Corporate Campaign Donations

The state's high court on Thursday upheld a ban on corporate donations to political candidates, a decision one plaintiff said he hopes to appeal to the United States Supreme Court.

The Massachusetts Supreme Judicial Court, in an opinion written by Chief Justice Ralph Gants, sided against plaintiffs 126 Self Storage Inc. and 1A Auto Inc. The court said the ban does not violate free speech rights and can help prevent actual and perceived corruption.

Allowing corporate contributions would create "a serious threat of quid pro quo corruption," Gants wrote.

"In just the last decade, several Massachusetts politicians have been convicted of crimes stemming from bribery schemes intended to benefit corporations," Gants wrote, going on to say that it would be "unrealistic for a court to require the Legislature to wait for evidence of widespread quid pro quo corruption resulting from corporate contributions before taking steps to prevent such corruption."

Massachusetts law prohibits corporations from contributing directly to candidates or establishing political action committees but allows them to make unlimited independent expenditures, with certain disclosure requirements, that are used to advocate for or against candidates but do not go directly to their campaigns. The plaintiffs argued the ban violates their First Amendment rights and unfairly applies to corporations but not other entities like unions and nonprofits.

Michael Kane, the owner of the Ashland-based 126 Self Storage, said on a conference call with reporters Thursday that he would like to take the case to the Supreme Court. The attorney representing the plaintiffs, Goldwater Institute senior fellow Jim Manley, said he would be "more than happy to ask the court to resolve this dispute."

"You can't treat people differently just because someone thinks that's the way it should be," Kane said. "You have to treat us all the same. Corporations, businesses and unions aren't all that different. We all have officers and boards of directors and employees, or represent employees, et cetera. There's not that big a difference."

Manley said he still needed to discuss it with the plaintiffs, but he was "anticipating" they would request the Supreme Court hear their case. If they do, they would file a petition for the beginning of December, he said.

"The same rules should apply all across the board, to both sides of the bargaining table, and what the SJC said today was that the U.S. Constitution and the Massachusetts Constitution allows the state to discriminate against groups based on their viewpoints and ban certain viewpoints from contributing to candidates," Manley said. "That, we think is unconstitutional. We think the U.S. Supreme Court has actually said the opposite, has said that that is unconstitutional, and it's my hope that the U.S. Supreme Court will weigh in and change the outcome in this case."

Kane is a member of the board of the Massachusetts Fiscal Alliance, which was founded by 1A Auto President and CEO Rick Green. Green is the Republican nominee in the 3rd Congressional District.

Paul Craney, a Mass Fiscal board member and spokesman, called the ruling a "major disappointment that only further upholds the country's most unfair state campaign finance law."

"Since it was first enacted decades ago, the union loophole has tainted countless elections across our state, even giving a louder voice to out of state union bosses than Massachusetts residents and employers," Craney said in a statement.

Though they cannot give directly to a candidate, corporations are allowed to give unlimited sums toward ballot question campaigns and they can set up outside groups to influence the political process. Unions and nonprofits that are not corporate-funded can give up to $15,000 to a single candidate in a year, which is 15 times the limit on an individual contribution.

The Supreme Judicial Court found there was no record of evidence showing lawmakers, in establishing the ban, acted with the "impermissible intent" of silencing the political speech of corporations "while favoring the political viewpoints of those entities that fall outside its scope."

Gants wrote that if lawmakers had intended to "accomplish viewpoint discrimination against businesses, one would certainly have expected it to include trade associations within its prohibitions," instead of leaving them excluded along with nonprofit corporations.

Judges Kimberly Budd and Scott Kafker, appointees of Gov. Charlie Baker, each penned separate concurring opinions. There was no dissent.

Kafker's opinion said the majority did not adequately address the issue of the law failing to prohibit contributions by other entities. He said it's difficult to determine if the ban's "differential treatment of business corporations rests on grounds considered legitimate, illegitimate or both."

"The ultimate issue, however, is not simply whether contributions by business corporations may be limited due to concerns about quid pro quo corruption or the appearance of such corruption, but whether a statutory scheme that bans such contributions while simultaneously permitting contributions by other organizations, including well-endowed nonprofit corporations and unions, is closely drawn to the State's interest in preventing corruption and its appearance," Kafker wrote, noting that there are examples of nonprofits and unions violating campaign finance law as well as corporations.