Supreme Court rejects Montana’s election spending law

Introduction

The U.S. Supreme Court’s 2010 Citizens United decision to allow unlimited corporate and union spending in federal elections, upheld Monday, also effectively wiped out similar prohibitions in 24 states.

Most states bowed to the original high court ruling, but Montana’s Supreme Court backed its own century-old law banning such expenditures in a 5-2 vote in December, thumbing its nose at the U.S. Supreme Court.

On Monday, the nation’s highest court hit back, reversing Montana’s law in a 5-4 vote, sending a clear message to the 23 other states that had similar bans in place at the time of the decision.

“The question presented in this case is whether the holding of Citizens United applies to the Montana state law. There can be no serious doubt that it does,” the court said in a brief opinion.

The 24 affected states have scrambled to address the fallout from the Citizens United decision. Nineteen have crafted new laws, some requiring disclosure of spending by outside groups, to address the formerly banned flow of corporate dollars, according to the Corporate Reform Coalition.

Montana’s court ruled that a history of corruption gave the state a compelling interest in maintaining its ban on corporate money being used to sway state elections. The U.S. Supreme Court was unconvinced.

“Montana has had a target on its back,” said Edwin Bender, of Montana’s National Institute on Money in State Politics. “Absolutely we are vulnerable and that’s why the state defended its spending limits and drew the line.”

Montana’s law was frozen by the U.S. Supreme Court in February.

Arguing the case for Montana was Democratic Attorney General Steve Bullock, who is also in a tightly contested governor’s race.

Copper kings

Montana passed the 1912 Corrupt Practices Act to rule out corporate contributions to candidates, as well as corporate independent spending to expressly support or oppose a candidate or political party.

Unlike the Citizens United decision, Montana’s law did not address union spending.

The state’s Supreme Court justices cited wealthy “Copper Kings” who had literally bought their way into elected office amid scandal, prompting the state’s law.

In the late 1800s, Montana industrialist W.A. Clark admitted to giving hundreds of thousands of dollars to state legislators who, at the time, elected candidates to the U.S. Senate. A bribery investigation in 1900 led to Clark’s resignation.

The state’s high court ruled that global mining interests maintain the power to corrupt elections in modern-day Montana.

“The corporate power that can be exerted with unlimited political spending,” said the court, “is still a vital interest to the people of Montana.”

The state’s ban came under attack soon after the Citizens United decision was handed down.

In 2010, Western Tradition Partnership — a “free-market” organization “dedicated to fighting environmental extremism” — sued the state. The group, which changed its name to American Tradition Partnership in 2011, argued that Citizens United made the Montana ban on corporate spending unconstitutional.

Bullock, the state’s attorney general, did not agree, nor did the state’s Commission of Political Practices, which claimed that Western Tradition Partnership, a 501(c)(4) “social welfare” organization, had illegally raised and spent money attacking candidates in the 2008 elections without registering with the state or disclosing its donors.

American Tradition was joined by Champion Painting and a gun rights nonprofit called Montana Sports Shooting Association, which is affiliated with the National Rifle Association. In October 2010, District Court Judge Jeffrey Sherlock sided with the corporations, noting the “the Copper Kings are a long-time gone to their tombs.”

Spending floods Montana election

American Tradition Partnership garnered the support of Terre Haute, Ind.-based lawyer James Bopp, who has argued against contribution limits in cases across the country, including Citizens United.

While the state awaited the U.S. Supreme Court’s decision, Montanans voted in the state’s June 5 primary — and American Tradition Partnership played a major role.

The group claimed victory, announcing two days after the vote that it “sent mailers and ran radio ads educating the public on candidates’ positions in at least 14 targeted districts, resulting in 12 pro-jobs candidates advancing to the general election.”

American Tradition has registered as a PAC this year, but its filings with the state show no trace of spending as of June 25.

American Tradition Partnership has operated under growing scrutiny since its emergence in 2008. The group has changed its name several times since its founding, and has filed with the IRS as both a 501 (c)(4) and as a 527. The group’s IRS filings contain scant information and are signed by its first treasurer Scott Shire, a GOP operative who was fined for campaign violations in Colorado in 2008.

The group and its 501(c)(3) arm American Tradition Institute have launched several lawsuits, including two additional challenges in U.S. District Court to Montana’s limits on direct contributions to candidates and to the state’s disclosure laws.

Other suits include a 2009 challenge to a Colorado city’s campaign finance law, a legal battle to get the University of Virginia to release emails by climate scientist Mike Mann, and another opposing a Colorado law mandating transitions to renewable energy.

In 2010, the Montana Commission on Political Practices, the state’s election agency concluded a two-year investigation of Western Tradition Partnership ­— the forerunner to American Tradition Partnership. The findings include allegations that the nonprofit had secretly raised corporate money and funneled it into a state-registered PAC called the Coalition for Energy and Environment, which spent money on 19 legislative races in 2008.

The Montana Supreme Court ruling cited the group’s fund-raising activity as an example of persistent corruption in the state.

Ahead of a 2010 election in which Western Tradition Partnership targeted several candidates with mailers, the organization was set to flout Montana’s disclosure rules:

“We’re not required to report the name or the amount of any contribution that we receive. So, if you decide to support this program, no politician, no bureaucrat, and no radical environmentalist will ever know you helped make this program possible,” the group wrote in a note to potential donors. “You can just sit back on election night and see what a difference you’ve made.”

Montana and friends

Montana is not alone in its fight against the Citizens United decision. New York Attorney General Eric Schneiderman filed a brief signed by 22 states and the District of Columbia backing Montana in May. Eight of the signing states had laws affected by the ruling.

Schneiderman’s brief argues that states “face a much greater risk of domination” from outside groups and therefore have a greater interest in ensuring the impartial election of local officials.

Before the decision, 14 states banned political activity from corporations and unions, nine more banned political activity only by corporations, and one state, New Hampshire, banned political activity only by unions, according to a report last year from the National Conference of State Legislatures.

Laws passed in Alaska, California and North Carolina require corporate groups funding campaign activity to list their top donors in every ad. In Connecticut, the CEO from the group must appear in each ad to claim responsibility.

Five states — Alabama, North Dakota, New Hampshire, Wyoming, and Montana — had bans in place, but have not passed new legislation to deal with the aftermath.

The U.S. Supreme Court leveled a blow to Montana’s long history of low-dollar elections, but Bender says the state’s political culture cannot easily be overturned.

“When someone comes in from outside and tries to dominate, there’s going to be a backlash,” he said. “The thing about big money in a low-money state, it’s going to stick out like a sore thumb.”