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Minn. Political Spending Law Faces Narrow Ban

(CN) - A federal judge granted an injunction against a Minnesota law requiring inactive political funds to file reports with the state's election board.

Direct campaign contributions by corporations are illegal in Minnesota, but the state lets corporations pay political funds to advocate for the election or defeat of candidates.

Minnesota requires corporations making political contributions greater than $100 to form a separate political fund with an appointed treasurer.

The fund must disclose contact information for its treasurer, and list all depositories or safe deposit boxes used.

In addition to corporations, the laws also regulate almost all associations, meaning a group of two or more people acting together, who are not all family members.

As long as the fund is in existence, the treasurer must file annual reports with the state election board detailing the fund's activity.

During general election years, which happen every other year, the treasurer must file four additional reports, 28 and 15 days before a primary, and 42 and 10 days before a general election.

These requirements continue until the fund is dissolved. Before dissolution, the treasurer must pay all of the fund's debts, dispose of all assets valued at more than $100 and file a termination report, including the same info required in the fund's periodic reports.

With supporting documentation, the treasurer has to keep track of all contributions exceeding $20, and all fund expenditures. The treasurer must retain any disclosure reports for four years after the filing date in case there is a state inspection.

Associations and treasurers that do not comply with the law are subject to criminal and civil penalties ranging from fines to five years imprisonment.

Even if the fund is inactive during a general election year it still has to file the five reports.

Three organizations - Minnesota Citizens Concerned for Life, the Taxpayers League of Minnesota and Coastal Travel Enterprises - sued Minnesota to block the laws in July 2010.

After U.S. District Judge Donovan Frank refused to enjoin the laws, a split three-judge panel of the 8th Circuit affirmed last year.

The full St. Louis-based court then agreed to hear the case en banc and vacated the panel decision on Sept. 5.

A six-judge majority enjoined the political fund reporting requirements, but all 11 judges agreed that the ban on corporate campaign contributions can stand.

Aiming to tailor its law in compliance with that ruling, Minnesota asked Judge Frank to preliminary enjoin Subdivision 7 of its campaign reporting laws which states: "If a reporting entity has no receipts or expenditures during a reporting period, the treasurer must file with the [state election] board at the time required by this section a statement to that effect."

The plaintiff organizations disagreed with the scope of the proposed injunction, however, claiming the court had required an injunction against the entire Minnesota independent expenditure political fund law.

They noted that Chief Judge William Riley had said in the majority opinion: "We conclude Minnesota's requirement that all associations make independent expenditures through an independent expenditure political fund ... is most likely unconstitutional."

But U.S. District Judge Donovan Frank found Friday that other language in the 8th Circuit's ruling refutes the organizations' claims.

"The general statement relied upon by plaintiffs is immediately preceded by the explanation that 'Minnesota has not advanced any relevant correlation between its identified interests and ongoing reporting requirements,'" he wrote Friday.

"Read together, it is clear to this court that the Eighth Circuit's opinion is limited to the constitutionality of the ongoing reporting requirements," he added.

As such, the 8-page ruling limits the preliminary injunction to enjoining inactive Minnesota political funds from having to file reports with the state's election board. Frank refused to block the state's other regulations of these funds.

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