On May 16, 2011, an Eighth Circuit Court of Appeals panel upheld Minnesota’s disclosure laws and ban on corporate contributions. The Brennan Center filed an amicus brief in the case, urging the Eighth Circuit to recognize the importance of transparency in money in politics.
Though the Eighth Circuit initially upheld the state’s disclosure laws, it struck them down on narrow grounds on en banc review.The decision is an outlier from decisions routinely upholding disclosure laws after the Supreme Court strongly affirmed their constitutionality and importance in Citizens United. The Eighth Circuit did, however, uphold the state’s ban on direct corporate contributions to candidates.
Background:
Prior to the Supreme Court’s opinion in Citizens United v. FEC, Minnesota and many other states prohibited corporations from spending general treasury funds on independent political expenditures. In Citizens United, the Court found that such restrictions violate a corporation’s First Amendment right to political speech. Citizens United, however, also upheld disclosure and disclaimer laws that apply to corporate independent expenditures, and emphasized that the disclosure of money in politics is a necessary part of our electoral process. After Citizens United, Minnesota appropriately responded to the Court’s directive: it promptly changed its law to permit corporate independent expenditures, while simultaneously ensuring that these expenditures are made with the transparency called for in Citizens United.
Minnesota’s new law to permit corporate independent expenditures was challenged in MCCL v. Swanson. This lawsuit was filed by James Bopp, Jr., the attorney behind the Citizens United case, as part of a nationwide effort to disrupt state election laws on the eve of the November 2010 election. The plaintiff corporations claimed that Minnesota’s disclosure requirements violate their First Amendment free speech rights. Plaintiffs also claimed that Minnesota’s ban on direct corporate contributions is no longer constitutional after Citizens United.
On September 20, 2010, the District Court denied Plaintiffs’ motion for a preliminary injunction, and concluded that they were unlikely to succeed on the merits of this case. The District Court found that Minnesota law – by freely permitting corporate independent expenditures; providing for the disclosure of those expenditures; and retaining limits on corporate contributions in order to combat corruption and the appearance of corruption – is plainly constitutional and fully comports with Supreme Court precedent, including Citizens United.
On December 22, 2010, the Brennan Center submitted an amicus brief to the Eighth Circuit Court of Appeals in support of Minnesota’s disclosure law for corporate independent expenditures. On May 16, 2011, an Eighth Circuit Court of Appeals panel (in agreement with the position urged by the Brennan Center) affirmed the district court’s opinion. On July 12, 2011, the Eighth Circuit granted petitioners’ request for an en banc review, vacating the Court’s prior ruling. On September 4, 2012, the Eigth Circuit, sitting en banc, struck down Minnesota’s disclosure law but upheld its ban on direct corporate contributions.
Summary of Brennan Center’s Amicus Argument:
The Brennan Center’s amicus brief was submitted to emphasize that the asserted constitutional rights of the plaintiff corporations are not the only constitutional interests at stake in this dispute. We urged the Court to give due regard to the First Amendment interests of voters and corporate shareholders in the campaign finance disclosure laws challenged in the litigation.
The Supreme Court and the federal courts have consistently recognized the public’s informational interest in knowing who is funding political speech. This information is critical so that voters can make informed decisions about political candidates and messages. This information is also critical so that shareholders can hold corporations responsible for political expenditures.
Moreover, despite the position taken by plaintiffs, many other business and corporate leaders have recognized that campaign finance reforms, including robust disclosure laws, help to protect the corporate bottom line. These business leaders recognize that rampant and undisclosed corporate political spending may exacerbate often extortionate pressures on American businesses to donate increasing sums to political campaigns. Disclosure – by enabling shareholders to serve as watchdogs for inappropriate uses of corporate treasuries – can mitigate the pressure on corporate America to participate in an escalating arms race of covert political spending.
The benefits of robust disclosure laws were extolled by the Supreme Court in Citizens United, and are well-documented in Minnesota and nationwide. Accordingly, in our amicus brief, the Brennan Center recommended that the Court support Minnesota’s efforts to ensure that voters receive the information they need to fully evaluate political speech during election campaigns, and that shareholders receive the information they need to ensure corporate accountability.
The Brennan Center also fully endorsed the arguments set forth by the State of Minnesota, which accurately characterized the relevant laws for the Court and thoroughly rebutted the plaintiffs’ legal claims.