11th Cir. Upholds Ala. Campaign Finance Rule

(CN) — An Alabama campaign finance law prohibiting cash transfers between political action committees does not violate the U.S. Constitution, a federal appellate court ruled.

The 11th Circuit found the lower court properly upheld the state's fundraising ban against a constitutional challenge brought by the Alabama Democratic Conference, a grassroots political organization.

The case, originally filed in the federal court in Mobile, involved an Alabama statute created in 2010 known informally as the PAC-to-PAC transfer ban.

According to the Sept. 27 ruling, the state's Fair Campaign Practices Act makes it illegal for any political action committee, or PAC, to "to make a contribution, expenditure, or any other transfer of funds to any other political action committee."

According to the ruling, the Alabama Democratic Conference was significantly impacted by the law, as it restricted its traditional fundraising efforts.

"The ban made it illegal for the ADC's organizational PAC to receive contributions from the Alabama Democratic Party and other PACs," wrote U.S. Circuit Judge Beverly Martin. "Before the 2010 enactment of the ban, the ADC raised about half its funds from these sources."

Following the law's enactment, the Democratic Conference reorganized its system "by establishing separate bank accounts for candidate contributions and independent expenditures."

It then filed suit in 2011 to prevent the enforcement of the law, arguing that it violated the First and Fourteenth Amendments.

Leaning specifically on the U.S. Supreme Court's 2010 Citizens United ruling, the organization argued that states could not "regulate contributions to PACs used solely for independent expenditures."

The lower court initially granted summary judgment in favor of the Democratic Conference, but was reversed on appeal. The district court ruled on remand that the law was constitutional as applied to the ADC, triggering the organization's current appeal.

In affirming the ruling, the 11th Circuit found the organization's use of separate bank accounts was insufficient to prevent the appearance of corruption.

"An account set up for independent expenditures can pass muster under a state's interest in anti-corruption only when it is truly independent from any coordination with a candidate," Martin wrote. "To create the necessary independence, an organization must do more than merely establish separate bank accounts for candidate contributions and independent expenditures. There must be safeguards to be sure that the funds raised for making independent expenditures are really used only for that purpose."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit