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U.S. Supreme Court Decision Has Significant Impact on Corporate Political Involvement in Minnesota


Campaign Finance Alert


U.S. Supreme Court decision has significant impact on corporate political involvement in Minnesota





On January 21, 2010, the United States Supreme Court issued a ruling in the case of Citizens United v Federal Election Commission and held that corporations and unions have the same right to engage in independent political speech as individuals - including the right to use general treasury dollars to expressly advocate the election or defeat of any candidate. This decision is expected to have a significant impact on corporate participation in federal, state and local elections.
 
Independent Expenditures and Electioneering Communication
The 183-page Supreme Court decision reversed decades of the Court's own precedent and included two significant holdings. First, the Court declared that laws prohibiting a corporation from using its own treasury funds to independently advocate for the election or defeat of a political candidate are an unconstitutional restraint on free speech. Second, the Court held that laws may not prohibit a corporation from engaging in independent, electioneering communications. Electioneering communications are television and radio communications that refer to a federal candidate within thirty (30) days of a primary election or within sixty (60) days of a general election.

Disclaimers, Disclosures and Other Limitations
Importantly, this ruling does not allow corporations to contribute money directly to candidates or to political parties. In addition, the Court upheld the ability of federal and state regulators to require disclaimers on political advertising and to enforce registration and reporting requirements to track political expenditures. Finally, the ruling has no effect on Internal Revenue Code restrictions on political expenditures. Because of this, all corporation's, but particularly non-profits, should be certain to consider the tax implications of any proposed political expenditure.

What the Ruling Means for Minnesota
Minnesota law currently contains a complete prohibition of corporate independent expenditures, with criminal penalties for violations. While the Court's ruling specifically applied to federal elections, it raises serious doubts about the constitutionality of Minnesota's restrictions on state and local political participation by corporations, at least as they apply to corporate independent expenditures.

Guidance Expected
It is anticipated that the Federal Election Commission, as well as state regulatory bodies, will promptly issue guidance and/or initiate rule making procedures to address the questions raised by this ruling. It is our understanding that the Minnesota Campaign Finance and Public Disclosure Board is already working on a "statement of guidance" related to corporate independent expenditures in Minnesota. The Board will discuss the impact in Minnesota of the Citizens United case at its February 2 meeting. We also anticipate that the 2010 Minnesota legislative session will consider legislation to make Minnesota law consistent with the Court's ruling and potentially imposing additional reporting and registration requirements.

Watch for further Winthrop & Weinstine, P.A., Campaign Finance Alerts which will provide additional information as it becomes available. Should you have specific questions regarding the Court's ruling, it's impact on your organization or any other campaign finance or lobbying issues, please contact:

John Knapp
(612) 604-6404
jknapp@winthrop.com

or

Tami Diehm
(612) 604-6658
tdiehm@winthrop.com
 
For More Information
Deb Cochran
Direct: (612) 604-6688
 
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