Minnesota can require corporations to report political spending, court says

  • Article by: JAMES WALSH
  • Star Tribune
  • May 16, 2011 - 11:59 PM

Minnesota can require corporations to disclose when they spend money to support or defeat a political candidate, the Eighth U.S. Circuit Court of Appeals said Monday.

By a 2-1 vote, the court sided with a federal judge in not blocking a state campaign finance law requiring corporate disclosure.

The three-judge panel also said it was unlikely that a group arguing that such requirements are unconstitutional would prevail in their lawsuit.

The result of the Appeals Court decision is that the law remains in effect.

"Minnesota did not ban corporate independent expenditures," the Appeals Court wrote. "Instead, based upon the lower court's findings, as strongly supported by the record, we find that Minnesota created a statutory scheme designed to require corporations to disclose certain information when making independent expenditures."

Requiring those disclosures is allowed by federal law, the court ruled.

The decision affirms a September 2010 ruling by U.S. District Judge Donovan Frank, in which he refused to strike down the law. In his ruling, Frank said that voters have "an interest in knowing who is speaking about a candidate on the eve of an election."

Minnesota Citizens Concerned for Life (MCCL), the Taxpayers League of Minnesota and Coastal Travel Enterprises argue that Minnesota's law hampers their right to free speech by improperly limiting corporate support for candidates and causes.

At the heart of the dispute is a 2010 law 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 those reports before the primary elections last year showed that Target, Best Buy and other corporations gave to MN Forward, a pro-business group that bought ads to support GOP gubernatorial candidate Tom Emmer. Groups at odds with Emmer's opposition to same-sex marriage launched protests against the companies.

The U.S. Supreme Court ruled last year that bans on "independent" expenditures were an infringement on free speech. But the court also said states could require disclosure of such spending. As a result, the Legislature amended the law to require disclosure.

A Minnesota 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.

But James Bopp Jr., an attorney for the corporations, said he believes the Appeals Court decision runs contrary to the Supreme Court case. Minnesota's requirements amount to an "undue burden," he said.

"We are surprised and disappointed," Bopp said Monday. "We intend to recommend to our client that they appeal."

James Walsh • 612-673-7428

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