Court Nixes Texas Ban on|Corporate PAC Donations

(CN) - Texas cannot bar political action committees from soliciting corporate donations, the 5th Circuit ruled, making it the fourth circuit to uphold indirect corporate political contributions since the Supreme Court's ruling in Citizens United.

Texans for Free Enterprise (TFE) is a political action committee that does not contribute directly to political campaigns but solicits donations to run ads supporting or opposing candidates.

In 2012 it challenged a section of the Texas election code barring corporations from making unauthorized political contributions, defined as an indirect transfer of money, goods or services in connection with a campaign.

A federal judge granted TFE an injunction in December 2012, though the 2012 election had already passed.

The 5th Circuit upheld the ruling Wednesday, following the example of the 7th Circuit, the 9th Circuit and the D.C. Circuit in their application of Citizens United v. Federal Election Commission, the Supreme Court's controversial ruling that corporate political spending is a form of protected speech.

"Every federal court that has considered the implications of Citizens United on independent groups like TFE has been in agreement: There is no difference in principle - at least where the only asserted state interest is in preventing apparent or actual corruption - between banning an organization such as TFE from engaging in advocacy and banning it from seeking funds to engage in that advocacy (or in giving funds to other organizations to allow them to engage in advocacy on its behalf)," Judge Jerry Smith wrote for the three-judge panel. (Parentheses in original.)

"We adopt the reasoning of our sister courts and hold that the challenged law is incompatible with the First Amendment," he continued.

The court said TFE easily showed that it will suffer irreparable harm without an injunction, even though the election season had passed.

"We have repeatedly held, however, that '[t]he "loss of First Amendment freedoms for even minimal periods of time constitutes irreparable injury justifying the grant of a preliminary injunction."' TFE's ability to speak is undoubtedly limited when it cannot raise money to pay for speech," the court concluded.

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