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

Lawsuit will seek equal protection for all those seeking to make their voices heard.

Boston, MA: The Massachusetts Fiscal Alliance, a nonpartisan, nonprofit advocacy group dedicated to promoting better government and right-of-center fiscal and economic policy solutions, today expressed support for the Goldwater Institute's efforts to seek equal protection in state campaign finance law.

"Current state campaign finance regulations don’t guarantee equal protection under the law,” said Paul Craney, the group’s executive director. “As many on both sides of the aisle have noted, something is wrong when unions can donate to one candidate up to $15,000 while individuals are limited to $1,000 and businesses are forbidden to donate anything at all. Under state law, businesses are even prohibited from organizing a PAC that contributes to candidates, which are permitted at the federal level.”