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For the past six months there has been no shortage of speculation about the impact of the U.S. Supreme Court’s January ruling in the Citizens United case, but many observers failed to note one of the likeliest consequences of all: more lawsuits.

Corporate campaign cash: CU and raise you

Peter Bartz-Gallagher)

According to Mike Dean, the executive director of Common Cause Minnesota, the plaintiffs in MCCL et al. “are challenging the way we disclose campaign contributions in Minnesota.” (Staff file photo: Peter Bartz-Gallagher)

New lawsuit looks to expand the business spending freedoms of Citizens United case

For the past six months there has been no shortage of speculation about the impact of the U.S. Supreme Court’s January ruling in the Citizens United case, but many observers failed to note one of the likeliest consequences of all: more lawsuits.

Now a group of Minnesota plaintiffs has headed to federal court in a first-of-its-kind legal action that looks to expand dramatically the campaign cash prerogatives of corporations.

The litigation — filed on behalf of two conservative state PACs, Minnesota Citizens Concerned for Life (MCCL) and the Taxpayers League, and one company, Coastal Travel Enterprises — includes a pair of motions to strike down new disclosure rules regarding corporate spending on elections and to lift the fetters that still bar corporations from contributing directly to candidates. According to Rep. Ryan Winkler, DFL-Golden Valley, the case represents the first challenge mounted anywhere to a law passed in response to Citizens United.

DFL legislators like Winkler and government information watchdogs like Common Cause Minnesota were aghast at the Citizens United ruling, which allowed corporations to make direct expenditures of company funds to influence elections. Those critics were consoled somewhat by the passage earlier this year of new rules requiring campaign spending reports.

Heightened disclosure, argued Winkler and others, was necessary to keep tabs on the expected onslaught of corporate spending in this year’s election.

But now opponents of Citizens United find themselves waging a battle on a new front.

“They are challenging the way we disclose campaign contributions in Minnesota. The scary thing is they would go a step further and allow direct contributions to candidates,” said Mike Dean, executive director of Common Cause Minnesota.

The pro-life MCCL and the fiscal hardline Taxpayers League of Minnesota are long-time mainstays of conservative politics in Minnesota. Coastal Travel Enterprises and its president, John Esmay, are relatively unknown quantities. But Esmay has made contributions to conservative business interests like Freedom Club PAC, and he also owns the St. Paul-based Builders Club. The plaintiffs referred all inquiries to perhaps the biggest player in the drama: the Terre Haute, Ind.,-law firm of Bopp, Coleson & Bostrom. (Minnesota Attorney General Lori Swanson’s office will represent the state.)

Joe La Rue, an attorney at the Bopp firm, spins a tale about the group’s aims that differs from the contentions of Dean and Winkler.

“We have no problem…with one-time disclosure reports for independent expenditures and we haven’t challenged that,” La Rue said. “I’ve read we’re trying to create a Wild West scenario. That’s not true.”

But the lawsuit would open the door to more direct avenues for corporations to spend money on elections. And the public would know less about corporate spending activities, said Hamline University professor David Schultz.

“If they are successful in their lawsuit, corporations would be free to give to whoever they wanted, including candidates themselves, without us knowing what that they are giving,” Schultz said.

The plaintiffs, if successful, could have a big an impact on this year’s election. “As things stand right now, it’s possible the court could rule on both of these motions or one motion before the election,” La Rue said.

Dean said next week he will start asking gubernatorial and legislative candidates to pledge that they will not accept corporate contributions of the kind they could receive if the plaintiffs prevail in the case.

The plaintiffs are arguing that it’s unconstitutional to require corporations to spend their money out of separate political funds like political action committees (PACs). They want to be able to spend directly from their own corporate treasuries on candidates.

The requirements that Minnesota corporations have to meet run afoul of their constitutional right to free speech, the complaint alleges.

“[R]equiring corporations to employ a PAC-option (e.g., a separate segregated fund) does not allow the corporation itself to speak and, even if it did, the option is onerously burdensome and inadequate to vindicate corporations free speech and association rights under the First Amendment,” according to the complaint.

La Rue argues that the time and resources required to operate a PAC have a deterrent effect on companies entering the political fray directly.

Dean discounted that argument.

“I disagree wholeheartedly with that,” he said. “The requirements we have for disclosure are pretty minimal. For them to argue that is a pretty clear sign that they don’t want to disclose where their contributions are coming from. The public should be concerned about that, because it’s an effort for them to operate in the shadows.”

La Rue argues that requiring businesses to spend money through PACs, and be subject to the disclosure requirements of Minnesota law, is unconstitutional due to donor disclosure rules.

“Frankly, for some groups on both the left and the right, that gets dicey because they don’t want the government to know,” La Rue said.

Success for the plaintiffs would likely mean a campaign cash bonanza for the GOP. All of the plaintiffs indicate in the complaint that they want to spend money on Tom Emmer’s GOP-endorsed gubernatorial campaign. They also cite a desire to spend on legislative races: The Taxpayers League, for example, says it wants to spend more than $100 to support Paul Gazelka’s GOP primary bid for state Senate versus incumbent Sen. Paul Koering, R-Fort Ripley.

The Bopp law firm is active in legal challenges in the wake of the Citizens United ruling. Legal experts note that disclosure and contribution laws weren’t struck down by the Supreme Court.

But the firm is handling other cases, in Arizona and elsewhere, that challenge laws regulating corporate campaign spending.

“It’s like in the movie ‘Jurassic Park’,” Winkler offered. “First they get to the island and find that the dinosaurs have been throwing themselves against the fences. That’s what this is about. Their case isn’t very strong, but if they do it here and other places around the country, they might find a way to break through.”

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