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Saying that voters have "an interest in knowing who is speaking about a candidate on the eve of an election," a federal judge on Monday refused to strike down a Minnesota campaign finance law requiring a corporation to disclose when it spends money to support or defeat a candidate.
U.S. District Judge Donovan Frank ruled that the plaintiffs -- Minnesota Citizens Concerned for Life (MCCL), the Taxpayers League of Minnesota and Coastal Travel Enterprises -- are unlikely to prove that the law hampers their right to free speech.
Instead, Frank said, the law "serves an important government interest."
"Such transparency assures that the electorate will be able to make informed decisions and properly evaluate the speakers and their messages," he said. "Invalidating the election laws at issue here would likely result in corporations making independent expenditures without any reporting or disclosure on the eve of the upcoming general election on Nov. 2. This result so close to the election would clearly harm the state, Minnesota voters, and the general public interest."
At the heart of the dispute is a law passed this year by the Legislature requiring reports on corporate spending for or against candidates. The law requires two reports to be filed before the primary and two more before the general election. The law also applies to groups supported by unions.
One of the pre-primary reports showed that Target, Best Buy and other corporations gave to MN Forward, a pro-business group that is buying ads to support GOP gubernatorial candidate Tom Emmer. The disclosures riled groups at odds with Emmer's opposition to same-sex marriage, and they launched a blistering attack on the companies.
Both sides said that an injunction by Frank would have allowed corporations to skip upcoming reporting deadlines and spend unlimited money on political advertising without needing to disclose any of it.
Attorney General Lori Swanson, whose office is defending the state from a lawsuit brought by the corporations, said: "An informed electorate is the cornerstone of our democracy. This ruling lets average voters know who is financing elections in Minnesota."
Corporations were long barred in Minnesota and elsewhere from spending revenues on ads or other material designed to help to elect or defeat candidates, although labor unions could do so in Minnesota and some other states.
The U.S. Supreme Court ruled this year that such prohibitions were an infringement on free speech. But the Supreme Court also said states could require some disclosure of such spending. As a result, the Legislature amended the law to require disclosure.
According to the law, a corporation may donate its own money to an existing independent expenditure committee or fund without providing any information beyond its name and address. If the business solicits and receives contributions beyond its general treasury revenue, it must disclose the source of the contributions.
If the donor corporation is a nonprofit and has donated $5,000 or more to independent expenditure funds or committees in a year, then it must disclose information about the underlying sources of money.
MCCL and the other corporations filed suit, saying that the law unnecessarily burdens companies and forces them to reveal more than is needed for accountability.
MCCL and Coastal planned to spend money advocating support for Emmer. The Taxpayers League wants to spend money supporting Republican Paul Gazelka for state senator. Gazelka defeated fellow Republican Paul Koering of Fort Ripley, who is gay, in the primary this month.
In addition to opposing disclosure requirements on independent political spending, the plaintiffs want to overturn prohibitions on corporations contributing directly to campaigns and parties.
A call to Joseph La Rue, the attorney representing the corporations, was not immediately returned Monday. It is not known if they will appeal Frank's ruling.
State Rep. Ryan Winkler, DFL-Golden Valley, who authored the disclosure laws last session, praised Frank's decision.
"After becoming the first state in the nation to step into the sunlight of corporate campaign disclosure, we can't afford to slip back into the shadows," Winkler said. "Minnesota needs transparency in its campaign disclosure laws."
James Walsh • 612-673-7428