Federal Appeals Court Strikes Minn. Disclosure Law, Aiding Corporate America’s Political Power

September 6, 2012

by Jeremy Leaming

A  federal appeals court has provided another victory for corporate America’s efforts to influence politicians, political parties and the nation’s elections. Big business hardly needed such a victory, especially since the U.S. Supreme Court in Citizens United v. FEC scrapped some significant campaign finance regulation laws thereby making it far easier for corporations to spend boatloads of money on local, state and federal elections of all kinds.

In a 6-5 ruling, the U.S. Court of Appeals for the Eighth Circuit temporarily blocked a provision of a Minnesota campaign finance law requiring corporations to regularly report on their political expenditures. Some rightwing and business groups challenged the provision arguing that political expenditures are protected by the First Amendment and any laws, including disclosure ones, that hinder the ability of corporations to spend on elections are unconstitutional.

The majority for the Eighth Circuit, citing Supreme Court precedent including Citizens United, said Minnesota’s disclosure provision would prove too burdensome for corporations. The provision, the majority claimed would force a company “to decide whether exercising its constitutional right is worth the time and expense of entering a long-term morass of regulatory red tape.”

The majority continued, “Minnesota’s law hinders associations from participating in the political debate and limits their access to the citizenry and the government.”

The dissenting judges, however, said the majority failed to fully understand Citizens United, noting that the high court did not flatly outlaw disclosure laws like the one in Minnesota.

The dissent maintained that Citizens United gave corporations a First Amendment right to speak “through political contributions.” But, the dissent continued, Citizens United also found that “the voting public has a right to know where the money is coming from.” Although a disclosure law might force a court to consider the law in a rigid manner, courts do not always have to strictly scrutinize a disclosure law that does not directly limit speech or “because the burdens of the law imposes are viewed as heavy enough to be an indirect limit. Subjecting disclosure laws to this type of analysis is circular and conclusory; it requires a court to assess the burden of a disclosure law to determine what level of scrutiny applies, then to evaluate that burden under exacting or strict scrutiny.”

Minn. State Rep. Ryan Winkler, primary sponsor of the Minnesota campaign finance law, told the Star Tribune that the Eight Circuit decision and Citizens United seriously undermines democracy. (Rep. Winkler was also involved in the founding of ACS's Minneapolis-St.Paul Lawyer Chapter.)

“These courts have degraded our democracy by eliminating rules that provide accountability for politicians and sunlight for the political spending of the richest and most powerful people and organizations in the country,” Winkler said.

President Obama recently suggested that one way to counter Citizens United is to support a constitutional amendment. Though the amendment process might ultimately fail, Obama said such action could “shine a spotlight on the super-Pac phenomenon and help apply pressure for change.”

The group, Free Speech For People, is advocating for a constitutional amendment. The group, co-founded by Jeffrey Clements, says it works to counter “the misuse of corporate power and restore republican democracy to the people. Clements is also author of an ACS Issue Brief on Citizens United, and the book, Corporations Are Not People.