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Massachusetts Court Okays Campaign Finance Loophole Favoring Unions

September 7, 2018

by Jacob Huebert
September 7, 2018

Can the government use campaign finance laws to give some groups a political advantage over others? The answer to that question might seem obvious like an obvious “no.” After all, the First Amendment and the Equal Protection Clause of the Fourteenth Amendment generally require the government to treat everyone alike—especially when it comes to participation in politics.

But the Massachusetts Supreme Judicial Court believes otherwise. In a decision issued yesterday, it upheld a Massachusetts scheme that bans employers—but not the labor unions they negotiate with—from making political contributions.

Under Massachusetts law, corporations and other business entities are completely banned from giving any money to a political candidate, party, or committee—but unions can give candidates, committees, and parties up to $15,000 each. The law also allows unions, but not businesses, to create their own political action committees, or PACs, which they can use to give even more money to the candidates they favor.

In 2015, the Goldwater Institute filed a lawsuit on behalf of two small businesses challenging this scheme for unconstitutionally tilting the political playing field.

Unfortunately, Massachusetts’ highest court upheld the law. The court noted that the U.S. Supreme Court upheld a federal ban on corporate contributions in a 2003 case called FEC v. Beaumont, and it concluded that the Massachusetts ban therefore must be constitutional as well.

But there are problems with that reasoning. Perhaps the biggest is that the federal ban the Supreme Court upheld, unlike the Massachusetts scheme, wasn’t discriminatory: It prohibited contributions by all types of organizations, including both corporations and unions. And in the years since the Beaumont decision, the U.S. Supreme Court has become increasingly intolerant of laws that favor some speakers over others. In Citizens United v. FEC, in which the Court struck down limits on corporations’ independent political spending, it ruled that the government could not restrict political speech “on the basis of the speaker’s corporate identity”—which is exactly what the Massachusetts law does.

A concurring opinion by Massachusetts Chief Justice Scott L. Kafker criticized the majority for failing to adequately address the discrimination problem. Kafker also pointed out that Citizens United rejected much of the reasoning underlying the Supreme Court’s past approval of discrimination against corporations’ political speech. But he still thought Beaumont required the court to uphold the Massachusetts law because Citizens United didn’t explicitly overrule Beaumont. He wrote that it “remains to be seen” whether the Supreme Court will apply the reasoning of Citizens United to strike down restrictions on corporations’ direct contributions to candidates.

We respectfully disagree that precedent required the Massachusetts court to uphold this law. At a minimum, Supreme Court precedent required the government to explain why the state believes that political contributions by businesses present an intolerable risk of corruption but contributions by unions do not. The state should have lost this case because it never even attempted to meet that burden.

But we would agree that the U.S. Supreme Court should clarify the law and explicitly direct lower courts to subject campaign finance laws that play favorites to “strict scrutiny” – the highest level of constitutional scrutiny, which few, if any, campaign contribution limits could survive. The Goldwater Institute intends to give the Court the opportunity to do so by asking it to hear this case.

Jacob Huebert is a senior attorney at the Goldwater Institute.



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