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Court Rips Wisconsin for PAC Donation Caps

CHICAGO (CN) - Wisconsin cannot cap donations to state political action committees at $10,000 per year, the 7th Circuit ruled, adding a new volume to laws rocked by the Supreme Court's landmark Citizens United ruling.

Wisconsin Right to Life PAC brought a broad-spectrum challenge to state campaign financing laws in anticipation of the 2010 midterm elections. Donation limits allegedly blocked two of the group's members, Terry and Mary Kohler, from making their desired $5,000 donations because of contributions to other political parties or candidates. Right to Life claimed that the statue violated the First Amendment because it is overbroad, creates favored categories of speakers and is not a narrowly tailored means of reducing quid pro quo corruption.

U.S. District Judge Charles Clevert Jr. stayed the federal complaint, however, awaiting the Wisconsin Supreme Court's resolution of a similar case, Wisconsin Prosperity Network v Myse.

With the restrictions still in place, Republicans took control in Wisconsin and began a campaign to curb public-employee collective bargaining rights. They captured the governor's office, both houses of the state Legislature, a U.S. Senate seat and two seats in the House of Representatives.

Challengers soon initiated recall elections for nine state senators, leading Right to Life PAC to revive its challenge. Judge Clevert declined to lift the stay, but a 7th Circuit motions panel issued an injunction against the PAC contribution limits and expedited the appeal after finding the group would likely succeed in its First Amendment challenge.

The three-judge appellate panel agreed. "The new [Wisconsin] rule may have impermissibly expanded the reach of these and other statutes (that's the question before the state Supreme Court), but it certainly did not narrow their application," Judge Diane Sykes wrote for the court (parentheses in original). "As such, the outcome in Wisconsin Prosperity Network will have no effect on the federal constitutional question raised here."

"Because the challenge to the statutory aggregate contribution limit will be unaffected by the Wisconsin Supreme Court's decision in Wisconsin Prosperity Network, there is no 'reasonable probability that the state court's clarification of state law might obviate the need for a federal constitutional ruling.'"

In the wake of Citizens United v. Federal Election Commission, restrictions on campaign donations can be justified only by governmental interest in preventing actual or apparent corruption, according to the 7th Circuit.

"Over time, various other justifications for restricting political speech have been offered - equalization of viewpoints, combating distortion, leveling electoral opportunity, encouraging the use of public financing, and reducing the appearance of favoritism and undue political access or influences - but the court has repudiated them all," Sykes wrote. "As such, after Citizens United there is no valid governmental interest sufficient to justify imposing limits on fundraising by independent-expenditure organizations." (Italics in original.)

As such, Wisconsin's $10,000 aggregate annual contribution limit is unconstitutional when applied to organizations which engage only in independent expenditures for political speech.

"The defendants have no valid response to this line of authority," Sykes wrote. "They argue only that large contributions to independent-expenditure groups create the appearance of corruption 'in more indirect ways' - for example, through 'the proverbial wink or nod between donor and candidate regarding the donor's uncoordinated beyond-limits contribution to an independent expenditure political committee.' ... This argument is foreclosed by Citizens United."

The Wisconsin Government Accountability Board and the Milwaukee County district attorney had claimed that uncapped donations could amount to indirect corruption, like "the proverbial 'wink or nod' between donor and candidate." Sykes found, however, that this hypothetical "suggests only that the independent committee is not truly independent."

"If that's true, the committee would not qualify for the free-speech safe harbor for independent expenditures," she added.

The D.C., 4th and 9th Circuits have also struck down contribution limits when applied to PACs. The 4th Circuit's decision preceded Citizens United.

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