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State campaign finance law faces legal challenge

Labor has unfair edge, group says

A conservative legal group filed a lawsuit Tuesday challenging the state’s century-old ban on corporate contributions to political candidates, and injecting new life into a long-running debate over the influence of special interests in Massachusetts politics.

The Goldwater Institute, a Phoenix-based organization with growing national ambitions, argues that the law infringes on the free-speech rights of businesses and puts corporations at a sharp disadvantage in their political skirmishes with organized labor.

State rules allow unions to donate up to $15,000 to an individual candidate.

“It’s about equality and fairness,” said Jim Manley, a senior attorney with the Goldwater Institute.

Observers are split on how the case might fare in the state courts or — if it gets there — the US Supreme Court, whose Citizens United decision helped open the gates to corporate spending in politics.


Laurence H. Tribe, a constitutional law professor at Harvard University, said “the law is moving inexorably in the direction of invalidating almost all campaign finance limits.”

Properly designed limits on direct corporate contributions to candidates may be one of the few restrictions that survive, he said. However, Tribe also suggested the Massachusetts law, as enforced, is not likely to meet court muster.

“The fact that this law is so uneven in its application to corporations and unions makes it very hard to defend,” he said.

Tara Malloy, senior counsel with the Campaign Legal Center in Washington, D.C., agreed that Citizens United and subsequent Supreme Court decisions have upended campaign finance law.

But, she said, there is no reason to believe that restrictions on direct corporate contributions to candidates and parties, long a concern of lawmakers and the courts, are in danger. “If I had to put money one way or the other, I would put money on the law being upheld,” Malloy said.

Two years ago, the US Court of Appeals for the Eighth Circuit upheld an Iowa ban on direct corporate contributions. The Supreme Court declined to hear an appeal of the case.


Iowa and Massachusetts are two of a handful of states that bar direct corporate donations to candidates but permit unions to give.

The Goldwater Institute filed the lawsuit Tuesday in Suffolk Superior Court on behalf of two Massachusetts businesses, 1A Auto Inc., a Pepperell auto supplies company, and 126 Self Storage in Ashland.

Rick Green, co-owner of 1A Auto, is chairman of the board at Massachusetts Fiscal Alliance, a Boston-based conservative advocacy group. Michael Kane, owner of 126 Self Storage, also serves on the organization’s board.

The lawsuit named the state’s Office of Campaign and Political Finance, which administers campaign finance law. The office declined to comment Tuesday. Attorney General Maura Healey’s office, which is expected to defend the state against the lawsuit, also declined to comment.

Rich Paris, president of Boston Firefighters Local 718, said he had not seen the legal filing, but he dismissed the argument that unions have an unfair advantage on Beacon Hill and in city halls across the state.

“I wouldn’t say the unions are getting special treatment,” he said. “Come on, these big corporations, they pump millions of dollars into candidates.”

Corporations are free to make unlimited independent expenditures in Massachusetts campaigns, but they are not allowed to coordinate their activities with political candidates. The plaintiffs in the suit filed Tuesday argue that direct donations are the most effective.


Pam Wilmot, executive director of good-government group Common Cause Massachusetts, said corporations should face greater restrictions than unions and other political actors, in part because of their ability to amass large sums of cash.

The country, she said, has long limited “what corporations can do and should do because of the history of them running amok and controlling politics, not just in this century but in previous ones,” she said.

The state’s ban on direct corporate contributions to political candidates dates, like the federal ban, to 1907 — the heart of the reformist progressive era.

The state law is silent on unions. But in 1986, the Office of Campaign and Political Finance ruled that unions could spend up to $15,000 per year — even on a single candidate.

Once they reach the threshold, unions can continue giving, but with stricter limits on contributions.

The interpretation has long rankled conservatives, who say it gives labor-friendly Democrats an unfair advantage. But the issue came to a head in the Boston mayor’s race in 2013, when eventual victor Martin J. Walsh took in scores of big-money donations from unions in Massachusetts and beyond.

Manley, of the Goldwater Institute, said the imbalance between union and corporate giving made the Massachusetts law an attractive target for his group.

The institute, named after former Arizona senator and presidential candidate Barry Goldwater, started as a conservative think tank in 1988. Its litigation wing sprouted eight years ago, and the group’s legal team has nearly doubled in the past year as it has reached for greater national influence.


The organization is also battling the Federal Aviation Administration over restrictions on private pilots, and fighting the State Bar Association of North Dakota over political spending.

In 2011, it won a Supreme Court challenge to an Arizona law that provided escalating public campaign funds to candidates squaring off against privately financed opponents.

David Scharfenberg can be reached at david.scharfen-berg@globe.com. Follow him on Twitter @dscharfGlobe.