Ninth Circuit Mostly Upholds Alaska Campaign-Finance Limits

(CN) – Upholding the bulk of an Alaska law limiting state-level campaign contributions, a split Ninth Circuit panel on Tuesday nonetheless struck down caps on state-level campaign contributions from nonresidents as unconstitutional.

The panel’s majority found the provision limiting annual aggregate out-of-state contributions to $3,000 doesn’t deter corruption and thus violates the First Amendment.

“States have an important interest in preserving the integrity of their political institutions. A vital method of doing so is by curbing large monetary contributions, which can corrode the public’s faith in its government’s responsiveness to the popular will,” U.S. Circuit Judge Consuelo Callahan wrote for the majority in a 31-page opinion.

“Thus, while campaign contributions implicate a contributor’s First Amendment right to express a particular political viewpoint, the state has an important interest in combating quid pro quo corruption or its appearance,” she continued. “But the court erred in upholding the nonresident aggregate contribution limit because it, at most, targets contributors’ influence over Alaska politics.”

In November 2015, three people and District 18 of the Alaska Republican Party challenged four provisions in the state’s campaign finance law on free speech grounds—the $500 annual limit on individual contributions to political candidates, the $500 limit on individual contributions to non-party political groups that contribute to candidates, the annual limits on contributions to candidates by political parties and their subdivisions, and the annual aggregate limits on contributions a candidate may accept from nonresidents of Alaska.

The law took effect through a 2006 state ballot initiative passed with 73 percent of the vote.

Following a seven-day bench trial in 2016, U.S. District Judge Timothy Burgess in Anchorage upheld all four provisions based on Montana Right to Life Ass’n v. Eddleman.

Eddleman, decided by the Ninth Circuit in 2003, requires review based on whether the challenged provision is targeted at an “important state interest” like deterring corruption and, if so, whether it is “closely drawn” to meet that interest.

On Tuesday, the majority upheld the first three provisions, ruling Alaska successfully demonstrated that corruption from campaign contributions is a real risk and that Alaska’s contribution limits aren’t so low that candidates can’t raise enough money to wage effective campaigns.

But it rejected the argument that Alaska’s interest in preventing corruption justified its limit on nonresident contributions. The court struck down the cap as unconstitutional based on the Supreme Court’s 2014 decision in McCutcheon v. FEC.

“We cannot agree that the nonresident limit targets quid pro quo corruption or its appearance,” Callahan wrote. “At most, the law aims to curb perceived ‘undue influence’ of out-of-state contributors—an interest that is no longer sound after Citizens United and McCutcheon.”

Alaska Attorney General Jahna Lindemuth said in a statement she was “disappointed” the court struck down Alaska’s limit on nonresident contributions.

“But we are pleased that the court recognized the importance of the majority of our contribution limits,” she said, adding “[t]he decision shows that the voters got it right in setting reasonable limits that the State can continue to enforce.”

Partially dissenting, U.S. Circuit Chief Judge Sidney Thomas said he would uphold the nonresident contribution limit.

He cited Alaska’s vulnerability to the oil and gas industry, which contributes up to 92 percent of the state budget, and a 2006 scandal implicating 10 percent of Alaska’s legislators in a scheme in which they accepted money from oil and services firm VECO in return for votes and other political favors.

“Given the oil and gas industry’s outsized impact on Alaska’s economy, it is not difficult to see why, as the district court found, Alaska is dependent upon and therefore particularly vulnerable to corruption by out-of-state corporations, whose interests are likely to be indifferent to those of Alaska’s residents,” Thomas wrote.

“Particularly in the aftermath of the VECO scandal, the nonresident aggregate contribution furthers Alaska’s interest in preventing the appearance of corruption,” he added.

U.S. Circuit Judge Carlos Bea also sat on the panel.

Plaintiffs’ counsel Kevin Clarkson, of Brena, Bell & Clarkson in Anchorage, did not respond to a request for comment.

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