Missouri Defends Campaign Donation Limits in Eighth Circuit

ST. LOUIS (CN) – A 2016 amendment to the Missouri Constitution banning PAC-to-PAC transfers that was overwhelmingly approved by voters should stand, an attorney for the state’s ethics commission argued Tuesday in the Eighth Circuit.

Free and Fair Election Fund and others sued Missouri and its ethics commission, the entity in charge of enforcing campaign finance laws, in Western Missouri federal court shortly after the amendment was approved in November 2016 by 70 percent of voters. The plaintiffs claimed it violated their right to political speech.

The amendment to Article VIII of the Missouri Constitution added Section 23, changing multiple campaign finance regulations, including limiting individual campaign contributions to candidates to $2,600 per election, prohibiting candidate committees from contributing to another candidate committee, and preventing certain corporations and unions from contributing to campaign committees, except contributions made through an established “continuing committee.”

Last year, Senior U.S. District Judge Ortrie Smith ruled that the $2,600 limit can stay in place, but the other regulations must go.

Smith found the ban on contributions made to Missouri political action committees, or PACs, by foreign businesses not authorized to do business in Missouri to be unconstitutional, as well as a prohibition on contributions from “heavily regulated industries,” because the amendment was not narrowly tailored enough to the state’s interest in maintaining fair elections.

Smith also found the ban on PAC-to-PAC contributions to be unconstitutional.

Ryan Bangert, Missouri’s deputy attorney general for civil litigation, represented the state and the Missouri Ethics Commission in oral arguments Tuesday in the Eighth Circuit.

He argued the bans meet the standard of exacting scrutiny and are needed to prevent quid pro quo corruption, which happens when a politician becomes obligated to make decisions on behalf of a donor because of monetary contributions.

Bangert said without the ban, PACs run by the same or similar entities could circumvent the $2,600 campaign limit by shifting money through each other and that the regulations are needed to ensure transparency to the public and the Missouri Ethics Commission.

“The fact that 70 percent of the voters approved this shows concern that this might happen,” he told the appeals court after the three-judge panel asked about the likelihood of that scenario unfolding.

Bangert also said a ruling in the 11th Circuit about Alabama campaign finance regulations supports the state’s case and tossing the regulations would create a “circuit flip.”

Attorney Chuck Hatfield represented the plaintiff Missouri Electric Cooperatives and argued that Judge Smith correctly ruled the bans go too far.

“The First Amendment does not allow the state to require suspenders when a belt will do,” Hatfield told the court, while arguing that the $2,600 campaign limit is sufficient to prevent quid pro quo corruption.

The judges pressed Hatfield on Bangert’s transparency argument.

“Transparency is a legitimate interest,” Hatfield said in an interview. “In Missouri we have pretty good transparency laws. One thing that didn’t come up here is that transparency is getting so much better. When you talk about some of the recent Supreme Court cases, they mention you can get online to look up who is giving … technology has gotten so much better, you don’t need to ban contributions. That’s nonsense.”

Hatfield countered that the 11th Circuit ruling does not apply to this case because Alabama’s laws were different and did not set a donation limit.

Hatfield told reporters that under the version of the amendment passed by voters, his client was completely banned from making any contributions. That was changed due to Smith’s ruling and that wasn’t argued by the state or the Missouri Ethics Commission on appeal.

Hatfield said the scenario of shifting money from PAC to PAC to circumvent the donor limitations is already illegal so it is moot.

“What is the purpose of the transparency?” Hatfield said in an interview. “Is it to trace illegality somehow? Certainly if there’s evidence that it’s illegal, you can trace it. It may take a few more steps, but we can only legislate so much on things we’ve made illegal.”

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