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The U.S. Supreme Court’s 3-month-old decision opening the door for corporations nationwide to make independent political expenditures has sent campaign finance officials across the country — including those in Minnesota — scrambling to work out necessary rule changes.

Campaign finance board weighs post-Citizens United rules

Gary Goldsmith

Gary Goldsmith

U.S. Supreme Court decision rewrites law — but how, exactly?

The U.S. Supreme Court’s 3-month-old decision opening the door for corporations nationwide to make independent political expenditures has sent campaign finance officials across the country — including those in Minnesota — scrambling to work out necessary rule changes.

The Minnesota Campaign Finance and Public Disclosure Board this week voted unanimously to ask staff to draft a memorandum on the Citizens United v. FEC case, in which the Supreme Court ruled that corporations and unions have a First Amendment right to use their general treasuries and profits to pay for political ads for and against specific candidates.

Board members are trying to figure out how to alter the state’s campaign finance rules to comply with the ruling — or whether they need to be changed at all.

“It’s our job to provide a framework and guidance to the folks who will take advantage of this because of the court’s decision,” board chair Bob Milbert told the group. “And we need to try to do it in a way that’s consistent with what we’ve done in the past, and within the framework of the court decision.”

Gary Goldsmith, the campaign finance board’s executive director, presented possible scenarios and options to the board this week without making any specific suggestions. However, Goldsmith told the board he believes that at least one specific section of state law is directly affected by the high court’s ruling.

That section prohibits any association not registered with the campaign finance board — including a corporation — from making a contribution of more than $100 to any candidate, party or party unit without providing “specified disclosure” of its source.

“This is new territory that we’re in,” Goldsmith said. “It doesn’t seem to me that we have much of an option of saying we don’t know or we have no clue [what corporations should do]. Organizations that are already registered with the state have asked us what to do.

“The other option is to wash our hands of it and say they can do what they will, and the statute doesn’t apply. I think it does somehow apply. We’re just trying to figure out how to make it apply.”

The Supreme Court case revolved around a documentary produced by the conservative nonprofit organization Citizens United, “Hillary: The Movie.” Under the federal Campaign Reform Act of 2002, known as the McCain-Feingold Law, a federal court in Washington ruled that the organization was prohibited from advertising the movie; the Supreme Court subsequently overturned the portion of the McCain-Feingold Law that barred corporations from making independent expenditures.

Minnesota is one of two dozen states seeking to clarify state law in the wake of the Citizens United ruling and is one of a dozen that are debating whether to require companies to disclose spending on political ads or possibly seek approval from corporate boards of directors or shareholders when independent expenditures are made.

The Supreme Court ruling explicitly said that corporations could be required to disclose the money spent on political ads and take responsibility for approving them in the same way that politicians do. The ruling left intact a law that bans corporations from contributing directly to candidates.

According to the National Conference of State Legislatures, in addition to Minnesota, the other states that are considering altering their disclosure laws are Alaska, Arizona, Connecticut, Maryland, New Hampshire, Ohio, South Dakota, Tennessee and West Virginia.

The Iowa Legislature has already approved a bill that requires company directors to approve of political expenditures, and the Colorado Supreme Court has ruled that the Citizens United decision rendered some provisions in the state’s campaign finance law unconstitutional.

In Montana, Attorney General Steve Bullock is defying the ruling, vowing to continue enforcing corporate political spending restrictions that date back to mining-interest scandals almost 100 years ago and daring opponents to sue the state. In testimony to Congress in February, Bullock said Montana’s corporate spending limit “has served us well and never been challenged.”

A Denver-based conservative group is testing that claim. The Western Tradition Partnership joined forces with the owner of a Montana paint company and filed a lawsuit challenging Montana’s limits on corporate expenditures as an unconstitutional ban on political speech.

“There are still people out there who think that corporate activity in campaigns is a bad thing, and so there are a lot of efforts to push back on the ruling,” Jennifer Bowser, a spokeswoman for the National Conference of State Legislatures, told the Washington Post last month.

And it’s not just lawmakers and state officials who are concerned about the ruling. More than 75,000 people have signed a petition on the website, which accuses the Supreme Court of being “misguided in principle and wrong on the law” in the Citizens United decision.

One of the options discussed by the Minnesota Campaign Finance Board would require corporations making independent expenditures to specify whether the money came from business income or from contributions. If the source was contributions, then disclosure would be required for any amount of $100 or more. There would be no limit imposed on the amount that a corporation could contribute; it would be required merely to disclose the source, and to offer further disclosure if the money came from contributions.

David Schultz, a political science and law professor at Hamline University, believes that the Campaign Finance Board has little leeway in changing the rules. He agreed that it could require corporations to stipulate whether an independent expenditure came from business income or contributions, and require disclosure of contribution income. “They probably even have the authority to [require certification] that the money didn’t come from any foreign nationals, too,” Schultz said. “But beyond that, I don’t think they have a whole heck of a lot of authority to do anything.”

The Minnesota Legislature would have to step in if the board sought to make more drastic changes in campaign finance law in order to comply with the Supreme Court ruling, Schultz said.

House and Senate bills that would lift the independent expenditure ban for corporations have stalled in committee this session.

Minnesota campaign finance board members appear unanimous in their resolve to tread lightly around the issue before deciding whether to make any changes — or whether they actually have the authority to do so.

“This is going to generate an awful lot of scheming,” Milbert said. “All we’re trying to do is provide a little framework to allow people some guidance on how to proceed.”

The memorandum will be prepared in time for the board’s next meeting on May 4.

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