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SJC upholds state ban on corporate political donations

Barry Chin/Globe Staff/File/Barry Chin/Globe Staff/File 2005

The state’s highest court on Thursday unanimously upheld Massachusetts’ longtime ban on corporate political donations to a candidate, rejecting a push by a Republican congressional nominee who argued the prohibition — which doesn’t extend to unions — violated businesses’ rights to free speech.

Supreme Judicial Court Chief Justice Ralph C. Gants wrote that allowing corporate contributions would create “a serious threat of quid pro quo corruption.” In issuing the 7-0 decision, the SJC upheld a lower court ruling that found that the state law does not unconstitutionally discriminate against the rights of a business by banning direct donations to a political campaign.


“Both history and common sense have demonstrated that, when corporations make contributions to political candidates, there is a risk of corruption, both actual and perceived,” Gants wrote. He cited “several Massachusetts politicians [who] have been convicted of crimes stemming from bribery schemes intended to benefit corporations,” including former speaker of the House Salvatore F. DiMasi, former Boston city councilor Chuck Turner, and former state senator Dianne Wilkerson.

Two companies — 1A Auto Inc., owned by Rick Green, and 126 Self Storage Inc., owned by Michael Kane — argued that the state’s campaign finance laws favor unions and by barring corporations from making direct contributions to candidates, the laws violate their rights to free speech. Both Green and Kane have held board positions for the conservative-leaning group, the Massachusetts Fiscal Alliance, which Green founded.

Green is also the GOP nominee for the Third Congressional District’s open seat in the Nov. 6 election. He is expected to face one of two Democrats — Lori Trahan or Dan Koh, whose too-close-to-call race may be heading toward a recount — and independent candidate Mike Mullen.

Kane and Jim Manley, a Goldwater Institute attorney who argued the case for the businesses, both said they expect to petition the US Supreme Court to hear the case.


“It’s still unfair treatment,” said Kane. “I’m being treated different than the unions. . . . Corporations, businesses, and unions are not all that different. We all have officers and boards of directors. There’s not a big difference.”

The Legislature in 2009 extended the ban to apply not only to traditional business corporations but also to any “professional corporation, partnership [or] limited liability company partnership.” Unions and nonprofits, meanwhile, are allowed to give up to $15,000 to a single candidate each year. Individuals are capped at $1,000.

But while banned from making direct contributions, a corporation is allowed to “spend as much money as it likes advocating on behalf of [a candidate], as long as it does so independently from him and his campaign,” Gants wrote. That includes, he said, paying for television commercials or making contributions to a super PAC.

“Without citing any legislative history, the plaintiffs appear to claim that the true legislative purpose in enacting [the law] and its subsequent amendments was to favor labor unions at the expense of corporations,” Gants wrote.

“If the Legislature intended [the law] to accomplish viewpoint discrimination against businesses, one would certainly have expected it to include trade associations within its prohibition,” he added. “Here, the Legislature has an important interest in preventing corruption and its appearance.”

But there appears to be some divisions in the court about the issue. Though he concurred with the decision, Justice Scott L. Kafker criticized the majority of the court for highlighting selective examples of corruption involving politicians, even though “one could just as easily provide selective examples of union and nonprofit violations.”


He pointed to union PACs that failed to disclose expenditures, and in particular, the American Federation of Teachers, which sought to “illegally disguise” the source of a contribution to a PAC that later spent $480,000 on television commercials supporting Mayor Martin J. Walsh during the final days of the 2013 Boston mayoral race.

“Would these few examples sufficiently justify a prohibition on direct contributions by unions or nonprofits, but not business corporations? Of course not,” Kafker wrote. “But under the court’s reasoning, a few such anecdotes appear sufficient to uphold such a statutory scheme.”

Kafker said he ultimately concurred, because in what he called a “post-Citizens United world,” the Supreme Court has yet to rule on whether “singling out business corporations for differential treatment . . . is impermissible.”

Reach Matt Stout at matt.stout@globe.com. Reach John Ellement at ellement@globe.com