It's Time to Close The Union Loophole

1A Auto v. Sullivan (Political Contribution Ban)

EXECUTIVE SUMMARY

The laws of six states prohibit businesses—but not unions or other groups—from contributing to political parties, committees, or candidates. This uneven playing field violates state and federal constitutional guarantees of equal protection, free speech, and free association.

On February 24th, two Massachusetts companies, in coordination with the nationally recognized Goldwater Institute, filed a bold lawsuit seeking to close the “union loophole” in Massachusetts campaign finance law, and both plaintiffs in the lawsuit have connections to the Massachusetts Fiscal Alliance. 1A Auto Inc., a family-owned auto parts retailer in Pepperell, is run by Rick Green, who is also the chairman of Massachusetts Fiscal Alliance's board of directors. Mike Kane, whose Ashland business, 126 Self Storage Inc., is also part of the suit, serves on Massachusetts Fiscal Alliance's board as well.

Massachusetts’ campaign contribution restrictions are tilted heavily in favor of unions and against businesses. Since 1908, businesses have faced a total contribution ban to state candidates. The “union loophole” originated by special rules implemented outside the normal legislative process in 1988. These special rules allow unions to contribute as much as $15,000 to state candidates, while individuals are permitted to contribute up to $1,000. After unions have donated $15,000 to a campaign, their political actions committees (PACs) can continue to contribute up to the ordinary limits. Meanwhile, business PACs are banned from contributing.


CASE LOGISTICS

The Goldwater Institute's summary of the case may be found here

Copy of Complaint for Declaratory and Injunctive Relief (2/24/2014).

Plaintiffs

1A Auto, Inc., a family-owned auto parts retailer in Pepperell, Mass. It started selling auto parts in 1999 and employs 217 people.

126 Self Storage, Inc., a small self-storage facility in Ashland, Mass. In business since 1999, it employs four people.

Defendant

Michael Sullivan, Director, Office of Campaign and Political Finance

Court

Massachusetts Superior Court

Judge

TBD

Relief sought

The businesses are asking the Massachusetts courts to declare the uneven contribution ban unconstitutional and enjoin its enforcement.

Date filed

February 24, 2015


CONTINUED

Concerns about such contributions are far from abstract. In 2013, then-Rep. Marty Walsh’s Boston mayoral campaign received more than $500,000 in campaign contributions from over 100 unions across the country, just in money donated in excess of the individual limit. In 2014, Warren Tolman, candidate for Attorney General, received numerous union donations in excess of the individual limit. Steven Tolman, Warren’s brother, was at the time and continues to this day to serve as the President of the Massachusetts AFL-CIO, one of the state’s most influential unions. Walsh and Tolman are far from unusual cases: unions both inside and outside the Commonwealth have a history of contributing directly to their preferred candidates in Massachusetts.

Even among the eight states with lopsided campaign finance laws, the $15,000 special union limit makes Massachusetts unique in the extent of favoritism shown to unions. Massachusetts is also one of a handful of states in the country to prohibit businesses from donating to PACs that can donate to candidates. Under federal campaign finance law, businesses are permitted to fund/administer these types of PACs, as are unions. These laws should not be confused with the landmark Supreme Court case Citizens United, which does not focus on the issue of direct donations to candidates and campaigns.

Unfortunately, last year’s bi-partisan legislative reform efforts to close the union loophole were defeated on a 28-120 vote in the House and a 10-28 vote in the Senate. While many experts, advocates, and lawmakers can debate the merits of numerous campaign finance regulations, what shouldn’t be up for debate is the existence of the union loophole in state campaign finance law and the use of campaign finance law to provide unfair advantages to any particular side. Through this lawsuit, the plaintiffs are asking the Massachusetts courts to, at a minimum, follow the majority rule and apply the same campaign finance limitations to unions and businesses.

Due to our state’s campaign finance laws, which legislative leaders failed to reform last year, state law favors unions over individuals and business. This results in an uneven playing field and violates state and federal constitutional guarantees of equal protection, free speech, and free association. The plaintiffs and the Goldwater Institute are challenging Massachusetts’ contribution ban in order to vindicate the constitutional rights of businesses to participate on equal footing with unions and other groups in the political process. If the bold lawsuit succeeds, it will embolden equal treatment on the political playing field and strengthen the rights of all residents to participate fully in the political process, something our lawmakers turned down when they had the chance last year.

Parts of the text above was originally part of a column published during the week of March 3rd, 2015 and part of the Goldwater's description of the lawsuit as found on their website. The column, news stories and/or editorials supporting its viewpoint, have appeared the Boston Globe, Boston Herald, the Associated Press, the State House News Service, the Boston Business Journal, the Fall River Herald News, the MetroWest Daily News, the Milford Daily News, and the Taunton Gazette, as well as on WGBH radio and WGBH's "Greater Boston."


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