Bloomberg News

Minnesota Campaign Cash Rules May Be Unlawful, Court Says

September 05, 2012

A Minnesota law that limits some organizations from making restricted political contributions is “most likely” unconstitutional, a federal appeals court in St. Louis ruled.

Groups including Citizens Concerned for Life Inc., the Taxpayers’ League of Minnesota and Coastal Travel Enterprises LLC sued Minnesota to affirm their right to make unsolicited “independent expenditures” for or against candidates for political office, citing the U.S. Constitution’s First Amendment, which guarantees free speech. A majority of the U.S. Court of Appeals for the Eighth Circuit said the law may be too restrictive.

“Independent expenditures are indisputably political speech, and any restrictions on those expenditures strike at the core of our electoral process and of the First Amendment freedoms,” the majority wrote today, singling out the law’s reporting requirements as especially burdensome.

According to an administrator cited by the court, a donor must create and register an independent expenditure political fund, appoint a treasurer, ensure money isn’t commingled with other funds, track expenditures, file annual reports for the life of the fund, log the expenditures, names and addresses of political committees, provide credit details, name people who receive non-campaign disbursements, and give details of nonprofits that provide administrative assistance.

Violators are subject to “substantial civil and criminal penalties” and must keep records for four years, according to the court.

‘Red Tape’

“Under Minnesota’s regulatory regime, an association is compelled to decide whether exercising its constitutional right is worth the time and expense of entering a long-term morass of regulatory red tape,” the judges wrote.

This is the second time the Eighth Circuit has been asked to consider the law. An earlier panel affirmed a lower court’s refusal to grant an injunction blocking enforcement of the law. Today’s ruling by an 11-judge panel overturned that ruling and sent the case back to the district court for further consideration.

The case is Minnesota Citizens Concerned for Life Inc. v. Swanson, 10-3126, U.S. Court of Appeals for the Eighth Circuit (St. Louis).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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