Lawsuit seeks to put business owners and labor unions on equal campaign finance footing
By Evan Lips | August 18, 2015, 13:38 EST
BOSTON – The era of Big Labor dominance in Massachusetts politics may soon be over.
Earlier this month, Suffolk County Superior Court Judge Linda Giles heard arguments in a lawsuit that challenges the privileged place of unions under current Massachusetts campaign finance law. Current law allows unincorporated groups, such as labor unions, to contribute up to $15,000 to candidates, parties and political committees, but bans campaign contributions by incorporated businesses.
The suit, brought by the owners of two small businesses, 1A Auto in Pepperell and Self Storage Inc., in Ashland, “challenges constitutionality of the law and argues that businesses have a right to participate in the political process on an equal footing with unions.”
Plaintiffs are seeking a preliminary injunction to stop the state from enforcing the ban on business contributions, arguing that “there is no legitimate justification for allowing unions to contribute thousands of dollars while completely banning any contributions from businesses.”
Giles has taken the motion under advisement.
Massachusetts is one of just six states in the nation that bans businesses and business-based political action groups (PACs) from making political campaign contributions.
Government employee unions and other unincorporated groups are allowed to contribute.
We’re from Arizona, and we’re here to help.
Plaintiffs are represented by the Goldwater Institute, a Phoenix, Arizona-based conservative think tank. Goldwater senior attorney Jim Manley told NewBostonPost that he is asking only for a level playing field for his clients.
“Massachusetts is the only state in America where unions have this special ability to contribute up to $15,000 before they even have to register as a political committee,” Manley said. “All we want is for unions and businesses to be treated the same.”
Rick Green, owner of 1A Auto, and Mike Kane, who owns Self Storage Inc., serve on the board of directors of Mass Fiscal Alliance, an organization dedicated to advocating for fiscal responsibility.
Executive Director Paul Craney said Mass Fiscal Alliance reached out to Goldwater, which then spent months researching the campaign finance law disparities between Massachusetts and the other 49 states.
“They found we had something happening here,” Craney said. “Massachusetts is the worst state in the country when it comes to disparities between unions and businesses.”
The devil is in the details.
Goldwater’s research unearthed several startling facts:
— Out of 50 states, just six (Alabama, Missouri, Nebraska, Oregon, Utah and Virginia) allow unlimited contributions from both businesses and unions.
— There are 16 states that prohibit direct contributions from both unions and businesses (as does federal law).
— There are 20 states, including the 16 that impose a direct union and business contribution ban, which limit contributions from both unions and businesses equally.
— Last summer, the state Legislature crushed a proposal from state Rep. Ryan Fattman (R-Sutton) that would have lowered the maximum labor union contribution amount to $1,000, the same maximum amount that individuals and business owners are allowed to donate to a specific campaign. The House rejected the Fattman proposal 120-28, while the Senate rejected the idea 28-10.
— In 2013, then-state Rep. Marty Walsh (D-Dorchester) received more than $600,000 in labor union donations during his successful Boston Mayoral campaign. The contributions came from more than 100 unions, including those from as far away as Wisconsin and Minnesota.
— Walsh served as the longtime president of Laborers Local 223, while holding the dual role of state representative, until he was elected mayor of Boston.
Craney said it was Walsh’s campaign that prompted Mass Fiscal Alliance to take a closer look at the state’s campaign finance laws.
“We reached out to (Goldwater) based off of what happened in the Boston municipal election,” Craney said. “That was front and center for us.
“No one is arguing that unions shouldn’t have a voice. What we’re arguing for is fairness in the law.”
As of press time, Walsh’s office had not returned repeated daily requests from the NewBostonPost for comment.
How did we get here?
In September 1988, then-state Campaign and Political Finance Director Mary F. McTigue issued an interpretive bulletin announcing that unincorporated groups, like labor unions, could donate up to $15,000 to candidates:
The original bulletin did not, however, “address expenditures made by business corporations, which (Massachusetts general law) regulates.”
The bulletin stated that McTigue’s office “has further advised that an organization, which is neither soliciting nor receiving contributions for political purposes but is making expenditures for such purposes,” will be viewed as a political committee “only if its political expenditures are more than incidental.”
In this case, “more than incidental” equates to any donations totaling more than $15,000.
Businesses, however, were then and are still banned from making any donations.
“This has to stop,” Kane said last week. “We want to be equal. If they can give $15,000 then I should be able to give $15,000. If they (unions) can’t give anything I shouldn’t be able to give anything either.”
Where the lawsuit currently stands
Attorneys for the commonwealth argue that a preliminary injunction would “harm” the public interest because it would overturn a decades-old campaign finance law, referring to the original ban that was ratified in 1907.
“This would upset settled expectations with respect to campaign finance laws, and effectively allow unlimited campaign contributions from corporations — all ‘based on a yet untested legal theory,’” the opposition filing states.
Common Cause Massachusetts, an organization opposed to partisan redistricting and big-money influence in elections, agrees that the law should treat unions and businesses equally, but nevertheless opposes the lawsuit.
“There is too much money in politics already,” the group said in a prepared statement. “Allowing corporations to donate to politicians will just increase special interest influence in politics and that is absolutely the wrong direction.”
Common Cause Massachusetts believes the solution is to make unions subject to the same $1,000 limit imposed on other groups or individuals, the same proposal Fattman offered in 2014.
Judge Giles is expected to hand down a ruling after Labor Day.
Kane, whose business employs approximately five workers, said all he’s looking for is fairness.
“I don’t want to keep unions from donating,” he said Thursday. “But we want to be equal.”
Kane said he was amazed when he saw the list of unions that donated to Walsh’s mayoral campaign.
“So here I am, a local guy born and raised out here in Ashland and running a small business, and I can’t give the same amount (to the Boston mayoral race) that a union based out of Missouri can,” Kane said. “These groups don’t even live in this state and they can give up to $15,000.”
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