Federal judge shoots down petition challenging Minnesota’s corporate contribution disclosure law

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A lawsuit that challenges Minnesota’s new laws for disclosing corporate spending on elections won’t affect tomorrow’s deadline for disclosure reports by political committees.

Judge Donovan Frank has denied a conservative law firm’s petition for an injunction against state disclosure laws that were enacted this year following the U.S. Supreme Court’s Citizens United Case.

The Supreme Court ruled 5-4 in January that it’s a violation of constitutionally protected speech to prohibit corporations from spending their own money to influence elections.

Joe LaRue, a lawyer for the Indiana-based Bopp law firm, on Aug. 20 argued on behalf of three Minnesota plaintiffs in federal court in St. Paul that requirements enacted by state lawmakers in the wake of the Citizens United ruling are unconstitutional. While the Supreme Court allows companies to spend money directly from their treasuries to influence elections, they must steer the money through political action committees and abide by disclosure requirements.

Minnesota Solicitor General Alan Gilbert argued state law on reporting corporate contributions doesn’t run afoul of the Supreme Court’s ruling.

The plaintiffs included Minnesota Citizens Concerned for Life and the Taxpayers League of Minnesota.

One legal analyst said corporations wouldn’t have had to report their contributions tomorrow if Frank granted the plaintiffs petition for an injunction. Its uncertain, however, if the plaintiffs will seek a stay and appeal to the U.S. Court of Appeals for the 8th Circuit.

Update 8:20 p.m.:

Rep. Ryan Winkler, DFL-Golden Valley, who sponsored the disclosure laws, said this evening he will continue in 2011 to introduce related proposals next year. They include:

Shareholder notification – Requiring corporations to provide quarterly
political activity notifications to shareholders, and to submit a copy of
the notification to Minnesota’s Campaign Finance and Public
Disclosure Board for public access.

Forty-eight hour reporting– Requiring political groups to file a report within 48
hours of the first public communication of campaign material that costs
$5,000 or more. A 48-hour report would also be required for electioneering
communications that cost a total of $25,000 or more. The CFPD board would give administrative penalties of up to four times the amount of the expenditure for violations and an electronic filing
requirement.

Foreign corporations expenditure ban – Prohibiting “foreign” corporations
(those that are not incorporated or formally registered to do business in
Minnesota) from making independent expenditures to support a candidate
for state or local office.

State contracts/conflict of interest – Disqualifing
any corporate or organized vendor from being awarded a state or local
government contract that makes a contribution or independent
expenditure up to 36 months prior to the date the contract is awarded,
and the contribution or expenditure is to a candidate for state office,
or to a candidate for local office who would be engaged in the bidding
and contracting process.

Tax credit disqualifications – Disqualifying corporations from qualifying
for various special tax provisions that are intended to subsidize or
encourage particular activities, if the corporations exceed a minimum
threshold of political expenditures in a tax year. The list of
taxprovisions could include JOBZ, the R&D credit, historic
rehabilitation credit, angel investment credit, sales tax refund for
capital equipment purchases and foreign operating corporations.