Corporations may now have the right to spend money on political advertising, but do you have the right to know that they are spending it? A federal court is considering an appeal that the Minnesota Solicitor General says could “gut” the disclosure provisions in Minnesota’s campaign finance law.
In 2010, Minnesota’s newly minted campaign finance law was instrumental in revealing the Target corporation had given money to a group that campaigned for a Governor candidate with anti-gay views. The consumer backlash against Target cost the company several times more than it’s $150,000 donation to Minnesota Forward.
Minnesota’s law was passed during the 2010 legislative session to make it compliant with the US Supreme Court Citizens United decision which basically said corporations could engage in political speech, but needed to disclose their spending.
Minnesota Citizens Concerned For Life (MCCL) challenged the law before the election, asking a court to prevent it from being enforced. The court refused and now the case is on appeal to the Eighth Circuit Court of Appeals. In arguments before the court this week, MCCL lawyer James Bopp contended that the reporting requirements of Minnesota law were an onerous burden on companies and effectively chilled free speech.
Minnesota Solicitor General alan Gilbert countered that Minnesota’s reporting requirements are less stringent than the federal ones and companies are free to directly spend on political ads as long as they properly reflect it on their books.
“We think in a very convoluted way, plaintiffs are attempting to gut the disclosure requirements of Minnesota law so that they can make independent expenditures without disclosing the very information to the public that Citizens United found to be essential,” said Gilbert before the court.
Gilbert pointed out that the Supreme Court Citizens United ruling very strongly endorsed the need for disclosure. “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. Shareholders can determine whether the 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 monied interests.
” So what the Supreme Court decided is that corporations have the right to make these independent expenditures, but just as importantly the public including shareholders have the right to know what the source is of those contributions,” concluded Gilbert.
MCCL’s Bopp said Minnesota’s law doesn’t allow a company to spend money for or against a candidate without creating a “political fund”. Gilbert said that wasn’t true.
“I want to make it really clear here what Minnesota law allows in terms of independent expenditures,” said Gilbert. “It was only in response to the Citizens United case that the Minnesota legislature during the 2010 session passed a law that allows a corporation to make independent expenditures in either of two ways. One would be just to contribute money to another independent expenditure political fund or to an independent expenditure political committee, again who’s major purpose is to engage in that activity. If they want they can do that or they could just keep track of their own treasury monies that they spend on independent expenditures. They have the absolute right to do that. And there can be no question about that. The district court rejected Mr. Bopp’s argument that somehow that was banned. It wasn’t banned. It was specifically authorized by Minnesota law.”
One of the three federal judges hearing the case quizzed the MCCL’s lawyer about his claim:
Judge: “You and opposing council seem to be at cross purposes here. I want to make sure I understand what you’re saying. The state’s attorney says that you can either give money, if you’re a corporation you can give money to the Elect James Bopp committee or…”
Bopp:” Independent expenditure fund… yes, yes, yes.”
Judge: “or you can go out and produce your own elect James Bopp ad. And you’re claiming you can’t do that?”
Bopp: “No you have to create a political fund. And it has to be, you have to write the check to the political fund and that political fund has all the trappings, including registration, appointing treasurer, periodic reports ad naseum as the Federal PAC requirements that citizens united expressly addressed and condemned.”
The court gave no timetable for ruling on the case.