Dec. 21, 2011 – The holding of the U.S. Supreme Court’s 5-4 decision in Citizens United v. FEC, 130 S. Ct. 876 (2010), has trickled down to invalidate part of a Wisconsin campaign finance law that caps contributions made to “political action committees.”

A panel for the U.S. Court of Appeals for the Seventh Circuit in Wisconsin Right to Life State Political Action Committee v. Barland et. al., No. 11-2623 (Dec. 12, 2011), invoked Citizens United in striking part of Wis. Stat. section 11.26(4).

That provision places a $10,000 aggregate cap on annual contributions to state and local candidates, political parties, and “political committees.” By definition, political committees, otherwise known as political action committees (PACs), can be corporate entities or groups of individuals that accept contributions and make disbursements for political activities.¹

According to a Wisconsin Democracy Campaign database, more than 2,300 PACS operate in Wisconsin. One of them is Wisconsin Right to Life (WRL), an anti-abortion PAC, which filed a federal lawsuit against members of Wisconsin’s Government Accountability Board before the state’s November 2010 elections.

WRL sought to halt enforcement of section 11.26(4)’s annual contribution cap. The cap, which has been in place in some form since 1973, prevented Wisconsin residents Terry and Mary Kohler from donating $5,000 to WRL because of other political contributions in 2010.

The U.S. District Court for the Eastern District of Wisconsin refused to halt enforcement of the contribution cap for the November 2010 elections.

But a motions panel for the Seventh Circuit granted a temporary injunction pending appeal on Aug. 1, 2011, just in time for recall elections concerning eight Wisconsin legislators on Aug. 9 and 16. The latest ruling makes the temporary injunction permanent with respect to PACs.

The ruling and the impact

In the decision, the three-judge panel ruled that section 11.26(4) infringes free speech rights to the extent that it limits contributions to PACs. That means individuals can make unlimited donations to PACs like WRL for production of television commercials or other political speech.

Mike McCabe, a lawyer and executive director of the Wisconsin Democracy Campaign, says the decision will make political action committees more powerful and candidates less relevant.

“People will see even more campaigning done by special interest surrogates, and a little less being done directly by candidates,” McCabe said.

That’s a problem, he says, because elections should be decided based on “dialogues” between voters and candidates, not special interest “monologues.”

McCabe acknowledged that the Seventh Circuit’s decision followed precedent set by the U.S. Supreme Court in Citizens United, which ruled that restrictions on political speech by independent organizations not connected with specific candidates are unconstitutional. He says these decisions are shredding protections that ensure fair elections.

But Barbara Lyons, executive director of Wisconsin Right to Life, says PACs have the constitutional right to speak to voters on political issues without restriction, as the courts have consistently ruled in various cases across the country.

“What we are doing is simply establishing our rights under the constitution and our ability to speak freely as guaranteed by the First Amendment,” Lyons said. “This decision was a step forward in promoting political speech within our state.”

The trickle-down effect of Citizens United

In Citizens United, the nation’s high court struck down, on free speech grounds, a federal law that prohibited corporations and labor unions from using general treasury funds to make “independent expenditures” when a primary or general election is approaching.

Citizens United is a corporation that wanted to promote and air a documentary critical of then-presidential candidate Hillary Clinton by paying $1.2 million to a cable company, which would make the documentary available on demand within 30 days of the primary election.

In general, an independent expenditure is money spent on “political speech presented to the electorate that is not coordinated with a candidate.”² The Citizens United majority affirmed that “political speech does not lose First Amendment protection ‘simply because its source is a corporation,’” and ruled that a corporation’s independent expenditures cannot be restricted.

“Limits on independent expenditures … have a chilling effect extending well beyond the [g]overnment’s interest in preventing quid pro quo corruption,” wrote U.S. Supreme Court Justice Anthony Kennedy for the majority.

Because Citizens United prevents government restrictions on independent expenditures, the Seventh Circuit Court of Appeals ruled that Wisconsin cannot cap contributions that individuals make to political action committees that engage in independent political speech.

“Importantly for our purposes here, Citizens United made it clear that the government’s interest in preventing actual or apparent corruption – an interest generally strong enough to justify some limits on contributions to candidates – cannot be used to justify restrictions on independent expenditures,” wrote Seventh Circuit Appeals Court Judge Diane Sykes.

Unlimited PAC fundraising means Wisconsin voters could see an uptick in future media communications from PACs, especially with a potential recall of Gov. Scott Walker in the works. Note that PACs must identify themselves in mass media communications like television ads, communicating that the ad was “paid for” by the organization.

According to a report by the National Institute on Money and State Politics, PACs spent $9.8 million in Wisconsin in 2010 with the section 11.26(4) fundraising restriction in place.

By Joe Forward, Legal Writer, State Bar of Wisconsin

Endnotes