1A Auto v. Sullivan (Political Contribution Ban) Update 

The lawsuit filed to close the Union Loophole (a state campaign finance law that gives unions the ability to fund political campaigns with five-figure donations while barring businesses from contributing at all) is headed to the Massachusetts Supreme Judicial Court.

The law under scrutiny lets unions directly give up to $15,000 to candidate campaigns, while limiting individuals to $1,000 and barring businesses from donating at all.  Yesterday, a Superior Court judge ruled that those disparities can continue. 

The suit was filed in 2015 by businesses owned by MassFiscal chairman Rick Green and board member Mike Kane. The lawsuit, 1A Auto v. Sullivan, sought equal protection for all. The judge’s opinion, which is now being appealed, held that treating unions and corporations differently "serves the anti-corruption interest."

The plaintiff’s attorney, Jim Manley of the Goldwater Institute, called the ruling "unfair from any perspective," and said the next step is to take the fight to the Supreme Judicial Court. 

To read news reports on this update, follow the links below. 
 
Boston Business Journal
MassLive
New Boston Post

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).

The Superior Court's Decision (4/6/17) can be found here. 

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 Judicial Supreme Court

Judge

TBD

Relief sought

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

Date originally filed

February 24, 2015

In honor of Equal Pay Day, MassFiscal requested payroll records broken down by gender from the MBTA’s two largest unions, the Carmen’s Union and Machinists Union Local 264 Boston.

The two unions dominate the MBTA, and unsurprisingly, they are run by a largely male workforce. Of the top ten union positions, men filled majority of the positions. In fact, for four of the ten most populous job categories, women made up less than ten percent of the workforce.

Amongst Repairers, only one woman is employed in the 312 positions available (less than .05%). Amongst 1,368 Surface Operators, the most common job included in the two unions, only 27 percent are women.

Overall, men accounted for 76 percent of the workforce, earning a sum of $177,676,532 in wages for 2,517 positions, while women account for 24 percent of the workforce, earning a sum of $52,402,771 in wages for the 784 positions.

 For a more complete breakdown, see below.

Today, Massachusetts Fiscal Alliance requested the Office of Campaign and Political Finance (OCPF) to review the campaign committee of State Rep. Michelle DuBois and her use of a PayPal account that appears to be in violation of state campaign finance law. Below is a copy of our letter to OCPF with the supporting attachments.

March 30, 2017

Michael Sullivan, Director

Office of Campaign and Political Finance

One Ashburton Pl # 411

Boston, MA 02108

Dear Mr. Sullivan,

On behalf of the Massachusetts Fiscal Alliance, I request OCPF to review the campaign committee of State Rep. Michelle DuBois and her use of a PayPal account that appears to be in violation of state campaign finance law. (See State Rep. DuBois’ PayPal here: https://www.facebook.com/michelle.dubois.52056 and below).

OCPF’s regulations require that a political committee that solicits contributions using PayPal must request occupation and employer information from contributors giving $200 or more in a year before directing the contributors to the PayPal site. In addition, the website must require contributors to certify, with an affirmative action, that they are responsible for making payments on the credit card and that the contributor’s personal funds will be the true source of the contributions. (See November 29, 2011 Agency Action Letter: http://files.ocpf.us/pdf/actions/orrall_11.pdf). It appears Rep. DuBois’ PayPal site is in violation of both requirements.

In response to OCPF’s review of a similar case (see November 2011 Agency Review), if the committee did not receive affirmative replies for the contributions in question, those contributions must be refunded. Such contributions must be returned as part of restitution, as the monies constitute an illegal advantage.

On behalf of the members of The Massachusetts Fiscal Alliance, thanks so much.

Sincerely,

Paul Diego Craney

Executive Director

Massachusetts Fiscal Alliance